Cost Reduction in Products
Increase margins without compromising quality and leadtimes
Cost reduction in existing products – without compromising with the most important
Many companies today face the same challenge: rising costs for materials, manufacturing, and logistics, while the ability to offset these increases through price adjustments is limited. At the same time, requirements for quality, sustainability, and regulatory compliance continue to grow. This makes cost reduction in existing products a key factor in maintaining competitiveness.
But effective cost optimization is not about quick cuts
It requires a structured approach where functionality, quality, and requirements are ensured throughout the entire process. With the right methodology, it is possible to identify cost savings without compromising product performance – and in many cases even improve it. Let us show you how we have done it for others.
We take a systematic approach to cost reduction across the entire product lifecycle:
- Identify cost-saving opportunities through analysis of design, materials, and component selection
- Ensure technical feasibility and assess impact on quality and compliance
- Develop clear business cases based on volume, investment, and payback time
- Optimize supplier selection and drive dialogue for improved purchasing conditions
- Lead implementation all the way to production
Experience shows that the real value often lies in the details. Even small cost reductions per component can have a significant impact in high-volume products. By combining technical expertise with business insight, we ensure that identified savings are not just ideas—but are successfully implemented in practice.
CASE – Smarter Material Selection
Challenge: High costs for interior components such as seats and armrests.
Solution: Together Tech implemented a material change from leather to vinyl. We conducted testing to verify that the product continued to meet all requirements, and evaluated multiple suppliers to ensure the best pricing. Minor adjustments were also made to the manufacturing process to accommodate the properties of vinyl.
Result: A change that achieved approximately 20% cost reduction, without compromising quality or functionality.
Case: Switching LED Suppliers for Cost Reduction
Sometimes small changes can make a big difference—and this is true even for lighting. We identified an opportunity to reduce costs by switching the supplier of LED lamps, without requiring any design changes or compromising light quality. By carefully reviewing specifications and color temperature, we achieved savings of approximately 10%, which was highly appreciated by our client.
Opportunity:
- Reduce purchasing costs by switching LED lamp supplier
- Estimated savings: approx. 10%
Key Steps and Considerations:
1. Specification Review
- Ensure the new LED is compatible with the existing design
- No design changes should be required
2.Color Temperature
- Verify that the color temperature of the new LEDs matches the existing ones
- If old and new LEDs are used together, the color temperature should be identical to avoid visible differences
3.Additional Considerations
- Also check brightness (lumens), power consumption, and warranty
- Evaluate supplier reliability and delivery capacity
CASE – Optimized Surface Treatment
Challenge: High costs for screws with specialized surface treatment, even though they are not visible in the final product.
Solution: Together Tech led a project to change the screw’s surface treatment to a more cost-efficient alternative. In parallel, we benchmarked similar screws from suppliers with higher production volumes to secure the best pricing.
Result: An adjustment that resulted in approximately 15% lower cost, without impacting functionality or quality.
Do you want to know more? Contact us
FAQ – Cost Reduction in Products
What does cost reduction in existing products mean?
Cost reduction involves identifying and implementing changes in an existing product to lower manufacturing costs without compromising functionality, quality, or compliance.
How can product costs be reduced without affecting quality?
Through structured analysis of design, materials, and component selection, it is possible to identify alternatives that reduce costs while maintaining product performance and quality.
What types of cost savings are most common?
Common measures include material substitution, simplified design, optimized component selection, and improved supplier agreements.
We only have one product – is cost reduction still worthwhile?
Yes. Even small savings per component can add up over time, and improvements can also bring benefits such as easier manufacturing or better performance.
Will the cost of consultants outweigh the savings?
No. Initiatives are based on clear business cases, ensuring that savings exceed the cost of the project.
How do you ensure regulatory compliance during cost reduction?
By assessing technical and regulatory impact early in the process, all changes can be validated to meet applicable standards and approvals.
What level of savings can be expected?
Savings vary depending on the product and production volume, but even small cost reductions per unit can have a significant total impact in high-volume manufacturing.
Does cost reduction affect the supply chain?
Yes, it often involves reviewing suppliers and sourcing strategies to ensure both cost efficiency and reliable delivery performance.
How quickly can results be achieved from a cost reduction project?
Timelines vary, but with a structured approach, some savings can be realized relatively quickly after validation and implementation in production.