10 Useful Cost Saving Design Strategies for these Troubled Times

Oh what a week!

 

I finally got the time today to sit down and really think about the impact of these troubled times.  It has been a very hectic month since I officially started my new role, as a result, I really only hovered around the global impact from the US Sub-Prime Crises. With only snippets of news via early morning radio and the occasional Stock Market update on my iPhone, I never really had a chance to think about this crisis till today.

Doom. Gloom. Budget Cuts. Layoffs. Recession. These are common words and phrases we seem to hear all around us these days. I’m sure all of you will agree with me that it will be tough times ahead.

Troubled people don’t spend money; rather, they hoard it. This means our and consumer-related product and development industry will be affected by lowered revenues and profits. Logically, many companies respond by “tightening their belts” and cutting out “non-essential” activities. Many times such non-vital activities tend to be the functions of Design, Marketing, Advertising, and R&D.

Without sounding biased, I strongly encourage companies to be a little more far-sighted and do their best not to cut Design and Development budgets. History has shown that companies, who position themselves well through great design strategies, often make it out of the recession in much better shape than the competition. This is the time to make hard decisions not watered down compromises.

Here are some Design Strategies you can employ to beat those recession blues:

1) Get to know your target consumer better.
This is one of the key things that you should be always doing, during the good times and now more so during the bad ones. When you know your target consumer better, you can see from their eyes if the products you are selling or designing are really meaningful to them.

Optimization of your product’s experience is vital in creating great products that can beat the competition. In these times, when people have to make tough purchasing decisions, you can bet they will be very picky.

2) Make fewer products.
That’s right. Further to what we have discussed in point 1, you can now start to optimize the types of products you are making and toss out the ones that don’t make sense to your consumer and/or business. You should not be making products just because. You should be looking to design the type of products that can generate good margins or profits, rather than pushing the ones that just bring in revenue. Logical and clever “SKU” reduction is the name of the game.

3) Have a go with Face-lifts.
Face or body lifts are a simple way to get new products out with little investment in R&D. This is a good short-term strategy to take your best platforms or best selling products and perhaps make them a little better.

Another option is to reduce cost by taking your product development out of the house by engaging ODMs (original design manufacturer) organizations that can make your products by integrating their own proven component platforms. While it sounds like a good idea and many companies practice it, do watch out as this design strategy will impact your brand in the long term. The nature of the ODM business is that they tend to be reactive in nature and thus their products tend to follow the market not lead it.

Check out a recent guest article on this strategy at “The Underbelly of Design: Brand Dilution from Sourced Products” for a more in-depth discussion.

4) Clean up your brand strategies and communications.
This is a great time to ensure that your branding strategies are working well. Use insights from consumers to understand if you are communicating your brand and product values correctly. Also, Advertising & Promotion do not have to cost an arm and a leg these days. Sometimes a social media strategy can work wonders; a good example is what Nokia does whenever they release a new phone. Check out this example. At the very least, start a Blog to better engage your customers.

5) Focus your marketing plans and make hard decisions.
It is time to make those hard decisions. Niche and focus marketing is the name of the game. If your business is non-existent in the USA why continue to play there? Get back to basics and (SWOT) focus on your strengths, cover your weaknesses, prepare for threats, and leverage on your opportunities. In all cases, get Design to be the key facilitator in communicating your objectives both internally and to the markets.

6) Employ and deploy great design processes and product development management.
It is time to not only look outside but also inside. I’m sure everyone can improve their in-house creative process and not only that, I’m sure your design team can tell you how! (Or at least provide some good suggestions?) In any creative process, the key is to build “Passion”. “Passion” is the most important thing for great team cohesiveness. A good team that has “Passion” does the job efficiently, effectively and in one mind.

Don’t forget your overall development process too. “Time to Market”, product architecture development, technology implementation, BOM (Bill of Materials) and inventory management, Market Research processes etc. can all a place for improvement, not just the creative or design process.

7) Come up with strategic cost reduction product concepts.
One thing industrial designers are good at is in coming up with great strategic/platform ideas. Developing platform-based design strategies, sustainable concepts, and even modular concepts are all great examples off the top of my head. I’m sure if you put your mind to it, even you could come up with a great product range concept that has a very centralized approached to components.

8) Cost down your product.
Who says industrial designers can’t save money? One of the most underutilized skills that industrial designers have is analyzing a product and looking at creative ways of reducing BOM cost. This can be done by using more cost-effective materials, redesigning parts that can be better manufactured, improve the assembling and disassembling processes etc. While this activity is not as glamorous as coming up with the next iPod, it still serves a vital function in any organization.

I recently met this guy who introduced me to this new manufacturing technology called NMT (Nano Molding Technology). It allows plastics to be injection molded over aluminum creating an extremely strong bond with no extra post-processing required. Imagine the costs you could save in post processes? This could spell the end of the usual 2 piece: metal stuck with adhesive or tape over a plastic part assembly process.

9) Get design involved universally within your organization.
Designers are great problem solvers and facilitators of creative thinking. Get them involved in every facet of your organization as the creative outcomes could be a boon to your organization. From new consumer opportunities to better packing methods, to creative manufacturing management, the possibilities are endless.

10) Learn from your competition.
Finally, take the opportunity to learn from the competition. They are probably struggling as much as you are, so this is a good opportunity to study their strategic plans so that you could take advantage of their weakness and eventually overtake them. Designers are perfect for this role, as their work covers looking after competitive market audits, product teardowns, benchmarking and lastly the all-important design identity development and forecasting.

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And what about you my friends what are you doing for your organization in these troubled times? Anything you might like to add or suggest? I look forward to reading them in the comment section below. Talk soon!

4 Comments
  • Niels

    November 27, 2008 at 4:29 am Reply

    Hi DT,
    I especially agree with number two: “Make fewer products”
    Although this should be a continuous process, companies are forced the reconsider their portfolio. I think can also see this happening. Companies sell parts of the company that don’t belong to the core business and they start to focus and that thing they are good at.

  • DT

    December 4, 2008 at 1:00 pm Reply

    Hey Niels,
    Fully agree, in this time of troubles, the answer is not to compromise but to make decisions. I rather spend the money on a few great products than to spread it on double that number.

  • Designing through a recession | David Airey

    December 24, 2008 at 5:46 am Reply

    […] 10 cost-saving strategies for troubled times, from Design Sojourn. […]

  • Erik

    February 18, 2009 at 10:30 am Reply

    For sure, right on. The other thing that makes sense is to spend time doing long-term strategic product and brand planning.

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