Introduction
Product benchmarking is a valuable tool in value analysis and value engineering (VE) that involves comparing your product's performance, features, and costs against those of competitors or industry standards. This process helps identify strengths and weaknesses by providing a clear picture of how your product stacks up in the market.
Benchmarking: The Core Steps
- Planning: The process begins with defining the specific goals. This is followed by selecting the benchmarking product and outlining the processes or specific functions that will be targeted in the benchmarking process.
- Business Analysis: Identify competitors in the market and gather data related to the product you’re manufacturing and similar products available in the market. Ensure the data is verified and accurate.
- Competitive Landscape: Analyse acquired data and develop a comparative analysis displaying parameters like BoM, costs, features, performance, or emerging trends of the product.
- Identify Opportunities: Brainstorm and develop ideas to identify any improvement areas related to the product and create a fundamental scope of the project
- Implementation: Develop an action plan clearly defining the timelines and accountability. Next, execute the planned strategy and monitor it at regular intervals.
Defining Value Engineering and Value Analysis
Value Analysis is aimed at cost reduction, whereas Value Engineering targets both cost reduction and value improvement.
Benchmarking helps you achieve exactly that – cost optimization and enhanced performance.
Benchmarking Methodology – iLenSys Approach
At iLenSys, we bring extensive expertise to VA-VE projects.
Our focus on Value Analysis (VA) for existing products is designed to drive cost reduction and enhance product function.
1. Develop Competitive Landscape
- Identify similar products available in the market and choose based on the cost and features.
- Document product specifications and develop a metric highlighting product characteristics.
- Identify the focus areas that would result in identifying improvement areas related to cost and performance.
Example of a Competitive Landscape
2. Tear Down
- The procedure involves disassembly of the product to reveal its internal components and structure.
- Data is collected to record precise information about each component and subsystem, such as materials, dimensions, and assembly processes
3. Should Costing
- Analyse the cost for each component and sub-assemblies, and overall product as well.
- These costs include various parameters like manufacturing locations, labour, machine, logistics, and materials.
4. Brainstorming for Value Stream Mapping
- Involve cross-functional teams from manufacturing, design, quality, compliance and regulatory and work on ideas to develop preliminary scope for quality, cost, and performance-improvement projects.
- Work with multiple sourcing teams across the geographies to identify alternative suppliers for supply chain optimization and cost benefit.
5. Report Generation
- 3D model is generated for products using virtualization method.
- Visual inputs are garnered for manufacturing teams to simplify assembly process.
- Cost BOM for the product is fully developed.
- Summary of feasible cost and value improvement projects is developed.
iLenSys' Capabilities
- Established process for feature and cost benchmarking for various processes.
- In-Depth understanding and application of VAVE methodologies.
- Dedicated team for conducting benchmarking.
- Understanding of global standards, certification, and quality standards.
- 3D printing and lab infrastructure to support the teams to develop CAD models and run feasibility analysis.
Conclusion
Product benchmarking in value analysis is instrumental in optimizing costs while ensuring optimum product productivity and performance. This process identifies the best practices for effective resource allocation and streamlining production. As a result, businesses can enhance product value, achieve cost savings, and ensure high performance, all while staying competitive in the market.
Schedule a demo to ensure a successful product launch and gain valuable insights into competitive product-market strategies.
