In our experience, the majority of features and functions on many products are completely lost on customers. Or, customers are absolutely willing to co-design products with their suppliers and share in the benefit. This simple mantra has proven very effective in driving reduction in product costs across many categories.
We know that technical cost reduction is a sophisticated method of analyzing component costs and systematically reducing them through changes in design and/or production. AlixPartners combines purchasing, engineering, and manufacturing skill sets and employs a highly structured approach for this work.
We disaggregate component costs, and develop creative solutions for driving down those costs through changes to specifications, value chain integration and production processes. Technical cost reduction is a powerful approach because it cuts across functional departments and value chain participants to identify and implement savings.