Tips to Cut Product Development Costs
Many innovators, entrepreneurs, start-up companies, and small/medium enterprises have very limited product development budgets. Therefore, these companies need to be very smart about properly spending their money to continue moving forward in the product development life cycle and saving cash for later in the product development game. In order to save costs, many organizations try to cut corners by integrating or altogether skipping product development phases. This not only ends up costing more money but the total time it takes to complete the product will also inadvertently increase.
Product Development is a process that when followed properly results in a tangible product that can be sold to customers for revenue and hopefully profit. In order to get quickly into the revenue stage, it is important to develop a process that results in fast product time to market, high quality, and minimal development costs. Throughout this process, there are ways that the entrepreneurs, innovators, or small companies can save money without cutting corners.
This is the first article of two providing tips on how how entrepreneurs and companies can be smart and spend the least amount of money throughout the product development life cycle. Check out these first three tips:
Define Your Product Before Starting Anything!
This might sound like an obvious suggestion but many companies and entrepreneurs begin product development without really knowing what they are trying to design and produce. The first step before commissioning new product development should be to document the required features and functionality so that there are goals for the team to pursue. Without first defining and communicating these requirements, the team will be moving forward blindly, wasting valuable time and money on unnecessary changes caused by the vagueness and ambiguity of the cosmetic, material, functional, and engineering requirements.
One way to compile a complete list of product specifications is to answer the following questions:
- How will the product perform and what are the functional characteristics?
- Will the product interface with other products outside of your control?
- What are the industrial design requirements (the look of the product)?
- What are the human factors requirements (the feel and human interaction of the product)?
- Are there any installation, support, service, and maintenance requirements?
- What type of qualification, regulatory, safety, and standards compliance are required?
- Should the product be compatible with other products and if so what are these requirements?
- What are the packaging, shipping, and labeling requirements?
The effort required to generate the product specifications list might seem unnecessary or excessive before starting new product development. On the contrary, this list is necessary to determine the product goals, will be used throughout the product development life cycle, and will save the team valuable time and money by focusing the team on the proper goals and objectives.
Make Sure The Product Functions as Envisioned.
Once the product specifications have been defined, the team must determine which specifications have yet to have technical feasibility proven. This phase of proving technical feasibility requires the use of proof-of-concept prototypes that bear little resemblance to the final product. As the name implies, the goal of this proof-of-concept prototype is to validate that the idea and concept is technically feasible and functions as envisioned.
For complex products that have multiple functional aspects, do not try to save money by integrating all of the functions into one all-inclusive prototype. Instead, it is more efficient to create proof-of-concept prototypes for each of the independent functions of the product. Remember that the goal is not to make a prototype that looks like the final product. The goal is to prove that it is possible to make the prototype function as specified in the product specification list. Making multiple proof-of-concept functional prototypes will allow the team to efficiently make changes to each prototype to find the optimal conditions that result in the function required.
Limit the Quantity and Increase the Utility of Prototypes.
Every prototype fabricated in each product development phase should be utilized as efficiently as possible. This means that there should be a qualification and test plan associated with each prototype. By documenting the test plan for each prototype rather than just blinding ordering a large quantity of prototypes, the organization becomes aware of the costs associated with each prototype while increasing the utility of the prototypes.
During the product development life cycle of the floe from Apt Innovations, the qualification tests for each prototype produced were clearly specified. As quoted in the BBC news article, Managing Director Jason Paul states that the prototypes looked “smarter” than past prototypes but in fact these prototypes were also smartly utilized. New new prototypes were only ordered after qualification tests were performed and design changes were required, saving Apt Innovations significant money and minimizing waste.
Only fabricate the quantity of prototypes sufficient to meet the qualification needs of the team plus a small number of replacements. Do not order a high quantity of prototypes in order to get a lower price per prototype. The additional prototypes purchased will usually be a total waste of money since design changes and prototype reworks could be required after performing qualification testing. Even worse, the additional prototypes might need to be scrapped as significant design changes could be needed to continue the qualification testing.
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