Analytics-to-Value for Optimising Products and Portfolios
(5 minute read)
Design-to-Value (DtV) programmes have helped companies enormously over the past several years in minimising manufacturers’ raw materials and components costs. The pandemic and its economic impact however have intensified efficiency pressures in many sectors. One of the most promising new strategies is Analytics-to-Value (AtV)- that can help with efficiencies. This blog draws from research to outline some key ideas about AtV strategies.
Analytics-to-Value (AtV) is a set of digital- and analytics-based practices that enable dramatic increases in efficiencies relating to product costs and portfolio optimisation. AtV uses a broader range of cost-optimisation tools than DtV and exploits a wide range of internal and external product and procurement data and applies a digital version of traditional material cost management practices. Leveraging the power of data and analytics, AtV allows for a greater level of insights to be generated within a very short span of time often at scale.
Focusing on Use Cases
Companies too often lead with technology, starting with an answer in search of a problem instead of a problem in search of an answer. The AtV approach allows companies to focus on problem solving for specific, business-generated use cases rather than apply technology for its own sake.
AtV Pillars
Combined with use case orientation, AtV companies are propped up by four pillars of sustainability and rigour:
- Product design and optimisation informed by solid understanding of customer needs and customer value
- Product portfolios optimised by modules, platforms, and standardisation
- Solution engineering and benchmarking for technical specifications and cost reductions
- Securing best cost points for product and service components.
These four pillars can be applied in any combination or individually to create impact at scale.
Iterative, agile design processes can accelerate innovation and time to market of new products. AtV can harness the power of customer data and analytics-driven insights to rapidly create Minimum Viable Product as digital, user-friendly products to market very quickly. Modularisation methods offer companies the ability to manage complexity and scale efficiently. External complexities of product lines and configurations can be counterbalanced by optimising product portfolios and reducing cost of complexity. Internal complexities of components can be reduced by platforms and further modularisation. Advanced analytics offer portfolio visualisation models which help a company identify distinct products or product clusters with shared components that can be structured and scaled efficiently.
AtV tools will have a profound impact on material cost reductions of the future. Companies can apply AtV principles to generate even more value by improving technical specifications, optimising raw materials and components and their supply costs, thus facilitating transformation at scale.
