For years, manufacturers attempted to cut the cost of making a product by taking aim at individual parts or raw materials and the companies that supplied them. Cut the price of the things that go into making a product and a company could lower the manufacturing costs and increase profitability. But those fixes are temporary, and need to be constantly re-negotiated.
More importantly, they don’t lead to a better product; in fact, quite the opposite at times. Despite decades of cost-cutting efforts across all industries, as much as 25 percent to 45 percent of all costs in engineered products add no value to the product or customer, according to our research.
