The Data Dividend: How Insights Lower Costs and Lift Margins

In today’s industrial landscape, margins are shrinking, competition is intensifying, and complexity is rising. "Profit is like oxygen, food, water and blood for the body; they are not the point of life, but without them, there is no life."

The question every industrial leader must answer is how to reduce costs without sacrificing product performance. The answer is data. Accurate design and procurement data reveals opportunities to reduce complexity, streamline supply chains, and unlock efficiencies. When applied effectively, it drives not only margin improvement but also sustainable competitiveness.  

A product’s cost isn’t decided on the factory floor; it is determined at the design table. It is largely understood that up to 80% of cost is baked in at the design stage and ineffective design for manufacture (DfM) is an ongoing source of frustration for production teams.

Market leaders are turning this around by involving wider functions early in the development cycle to optimize cost, manufacturing, and assembly. Other considerations such as advanced Design for X (DfX) elements such as customization, disassembly, re-use, carbon reduction, and recycling are also important levers. Product design data provides invaluable insights into the factors influencing product and manufacturing costs right from the inception of a product.  

Value analysis is another method business leaders can use to align and optimize design costs. These proactive approaches enable companies to make informed decisions to mitigate cost escalations and streamline production processes.

Winning on cost isn’t about cutting corners – it’s about using facts to challenge every assumption. By dissecting the Could Cost (what best-in-class sourcing and manufacturing would deliver) and the Should Cost (fact-based design expectations) with data-driven models, value engineering, and rigorous benchmarking, organizations can expose waste in the Does Cost and move decisively toward the Best Cost. 

Companies that systematically use should-cost, could-cost, and design data analytics achieve significant cost reductions (10–30%) while boosting functionality (efficiency, quality, uptime) – turning cost engineering into a source of competitive advantage. 

Technology moves quickly. In some cases, the product released months ago can be revised for cost efficiency. By scrutinizing design elements, material selections, and production methods with Should Cost tools business leaders can identify opportunities for optimization without compromising product quality or performance. This data-driven approach empowers companies to redesign products to maximize cost savings, enhance functionality, and meet ever-evolving customer demands. 

Using accurate design and cost data such as Should Cost models or Spend Analytics insights in sourcing and negotiations ensures the best price possible within the supply chain. Combining Cost Engineering and Procurement data rapidly identifies and delivers product savings through the lifecycle. 

Effective cost reduction extends beyond the boundaries of the manufacturing facility and encompasses the entire supply chain. Supply chain data facilitates seamless integration with suppliers, enabling collaboration on material selection, sourcing strategies, and cost optimization initiatives. By leveraging real-time data exchange and collaboration platforms, businesses can synchronize their supply chain activities, minimize lead times, and inventory, and negotiate favorable pricing terms with suppliers. 

Cost reduction is not a one-time endeavor but a continuous journey to operational excellence. By fostering a culture of continuous improvement supported by product design data, businesses can empower cross-functional teams to collaborate on cost optimization initiatives. Regular analysis of design data, feedback loops, and lessons learned from previous projects enable organizations to enhance design strategies, drive innovation, and stay ahead of the curve in a rapidly evolving marketplace.  

In the race to balance cost efficiency with product functionality, one factor consistently separates leaders from laggards: data. Using data intelligently manufacturers can cut costs across the board while enhancing product quality, reliability, and speed to market. These firms gain both operational efficiency and competitive differentiation. Leveraging product design and procurement data is not just a strategic advantage, it’s a prerequisite for success in the modern marketplace.