A power tool brand’s best-selling drill had not been reviewed in six years while competitors cut prices. A cross-functional teardown generated 64 ideas; the top six cut unit cost by $4.10 and part count from 47 to 39, worth around $615,000 a year.
Key numbers
A power tool brand's best-selling drill had been in production for six years. It sold well and had a strong reputation, but competitors had launched cheaper models, and retail buyers were pushing for price reductions. The drill had not been reviewed for cost since launch.
The situation
Unit cost was $38.60, with 47 parts. Material and labour costs had crept up over the years. The brand needed to reduce cost without compromising the durability and performance its customers expected.
What changed
The company ran a structured value engineering exercise, following the method in value engineering: taking cost out of mature products:
- A cross-functional team from design, manufacturing, purchasing, quality and sales tore down the drill and two competitor products side by side, comparing parts, materials, assembly methods and features.
- Every part was analysed for its function and cost.
- 64 ideas were generated and scored by saving, implementation effort and risk.
- The top six ideas were implemented in two waves, each validated by durability, drop and performance testing before release.
What the data showed
The largest single saving, $1.35 per unit, came from combining the two motor housing halves into one moulding. A snap-fit battery latch replaced a screwed assembly, saving $0.90. A resin grade change on the handle saved $0.70, smaller packaging $0.55, removing a separate label plate $0.35 and standardising screws $0.25. Several ideas applied the Design for Manufacture and Assembly principle of removing parts and fasteners.
Results
Unit cost fell by $4.10, from $38.60 to $34.50. Part count dropped from 47 to 39. At current volumes, the saving is worth around $615,000 a year. Testing confirmed durability and performance were maintained.
Why the teardown worked
Comparing the drill with competitors showed how others had solved the same problems more simply. A cross-functional team brought perspectives that a design team alone would miss: purchasing on material costs, manufacturing on assembly time, sales on which features customers actually valued.
Lessons for your operation
- Review mature products regularly. Cost creeps while the market moves.
- Tear down competitor products alongside your own.
- Analyse function and cost together, part by part.
- Generate many ideas, then score them by saving, effort and risk.
- Validate every change with appropriate testing before release.
