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The authors would like to thank FabriceLe Garrec, Stephan Mohr, Lou Rassey, and JimWilliams for their contributions to this article.

Dave Fedewa

and

Ashish Kothari

areconsultants in McKinsey’s Chicago office, where

Ananth Narayanan

Squeezing more ideas fromproduct teardowns

Dave Fedewa, Ashish Kothari, and Ananth S. Narayanan

Operations Practice

Technophiles of all stripes love product teardowns—the time-honored practice of dismantling products to their constituent partsto spark fresh thinking. Yet few manufacturers get the full valueteardowns afford. Many senior executives marginalize the practice, viewing teardowns as Skunk Works exercises for engineersor cost-cutting tactics on the part of the purchasing department.Such views retard creativity and ensure that the ideas generatedin teardowns go unexplored, moldering in functional silos.But some companies go further. This interactive explores margin-improvement opportunities from teardowns that we’ve identifiedin our research and examines how companies are rethinkingtheir approaches to teardowns to save more money, break downthe silo mentality, and even improve the revenue potential of their products.

Industrial:

Redesign for lower costs

A manufacturer of materials-handling equipment wasdeveloping a new forklift truck with the goal of minimizing both its own manufacturingcosts and the customers’ cost of operating the product. Recognizingthat the vehicle’s weight was thekey design factor (a lighter vehicle would require less fuel to runand would have lower materialscosts) the company’s R&Dengineers conducted systematicteardowns of competitor’s productsto study new design possibilities.Meanwhile, executives broughtin marketers, who learned thatcustomers would indeed value thelower cost of ownership—andreduced CO2 emissions—broughtabout by the new design, butthey would be unwilling to pay apremium for them. This knowledgespurred the company’s engineersand purchasers to work togetherto reduce the weight of the new forklift truck by 7% (200 kg), whileultimately lowering manufactur-ing costs by 12% through acombination of design changes,sourcing from low-cost countries,“clean-sheet” costing, and othertraditional approaches.

The resulting vehicle con-sumed 4% less fuel thanits predecessor and emittedeight tons less CO2 overits lifespan—making it moreappealing to customers.

Front-tire diameterreduced,

and frontaxle moved closerto payload allowing forlighter counterweightin rear of vehicle

Engine, gearboxmoved

closerto rear of vehicle,shifting centerof gravity rearwardto supportnew counterweight

Counterweightreduced,

repositioned tosupport vehicle’s newcenter of gravity

Changes in fan designfrom blower fan to box fan:

35% cheaper

Elimination of metalbase-plate on product’scart:

4% reduction in costof cart

Integrated plug and fuseassembly:

12% cheaper; faster toassemble

Fewer printed circuitboards (PCB):

14% reductionin PCB cost

Self-tapping screws versus threaded inserts:

50% cheaper

High tech:

Break down silos

A medical-products company planned a series of teardownsto improve the design of itstherapeutic medical device. Togenerate new ideas, executivesinvited colleagues from purchasing,marketing, engineering, and salesto see how their product stacked upagainst four rival ones.Seeing the products together was an “Aha!” moment for thepurchasers, who quickly identifieda series of straightforward designchanges that, while invisible tocustomers, would significantly lower the cost of manufacturingthe device. Meanwhile, seeing theconfigurations of competitors’circuit boards spurred theteam’s salespeople, marketers,and engineers to discuss themanufacturing implications of the company’s modular approachto design. The engineers had longassumed that being able to mixand match various features afterfinal assembly was advantageousand had emphasized this capability in the product’s design. Yet thesalespeople reported that mostcustomers hardly ever orderedmore than a handful of modules atpurchase and rarely ordered moreafter assembly.

The conversations ultimatelyled to simplifications inthe product’s circuitry thatlowered purchasing costsby 23% and helped marketersidentify a new customersegment where the productmight command a higherprice.