According to McKinsey >50% of new product launches fail to hit business targets!¹

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Unmet targets mean:

1. Reduced margins leading to unprofitability and high carbon footprint to bad reputation
2. No willingness to pay from customers due to increased price or CO₂ emissions
3. Lost investments in product development, competitive edge & business growth

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Where lies the biggest opportunity for impact along the product lifecycle to ensure successful products?

80% of product total cost and CO2 impact are set during the design & development phase^2,3

Low levels of digitalization and high volatility make R&D intransparent

High customer demands for customized products and shorter development times complicate targeted cost and sustainability management in product development, especially for SMEs. R&D involves multiple departments, from executives to engineers to product and procurement managers, who currently rely on static spreadsheets. This leads to information asymmetries, inefficient processes, and siloed teams - resulting in unmet targets, wrong decisions, and missed savings opportunities.
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Summarized core reasons are:

• Lack of collaboration due to isolated teams, absence of cost awareness, restricted resources^1,4
• Product complexity due to changing concepts, variants and intransparent spreadsheet chaos
• Volatility & uncertainty in markets, supply chains, overhead costs, currency impacts etc.

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Static excel sheet and outdated software can't keep up with these dynamics, resulting in unmet targets of new launched products.

Reasons why spreadsheet are outdated:

• Scattered, inconsistent data across departments with manual tracking and high coordination effort.
• Product complexity leads to time-consuming calculations, and limits simulation possibilities.
• Manual data entry with missing integrations to other systems lead to inconsistent data & wrong decisions.
• No history and reuse of components from old projects, starting from scratch every time.
• Only experts understand scattered & complex data, leading to limited collaboration & missed optimizations.
• The know-how of experienced employees is lost when they leave the company due to a lack of standardization.

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The solution?
Creating transparency through centralized product cost- & carbon footprint management  

Moving away from error-prone spreadsheets towards digitized product cost- and carbon footprint management for hardware product development. With valuemize we have built a cloud-based software solution for industrial SMEs that promotes intuitive Bill of Material management to enable cost & sustainability transparency for cross-functional teams, leading to the optimization of product costs & carbon footprint. Increasing resource efficiency by automation, use of existing data & AI.

Product cost management in product development as no. 1 lever for highest profit growth⁴

Have more questions?

Reach out to our experts via our contact form or schedule a meeting to see how digital product cost and carbon footprint management can enhance your product's success.

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Sources:
1) McKinsey & Company

2) KAYSUN

3) EllenMacarthur

4) McKinsey & Company

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