Cost & Value Management helps companies reduce product costs while improving overall profitability by linking engineering design, cost structures, and customer value. Many organizations focus on cost reduction but struggle to understand which changes actually improve margins. FEV Consulting closes this gap by enabling better, value-driven product decisions.
Capabilities
Cost and Value Management
Many companies invest significant effort in cost reduction, yet struggle to translate these efforts into measurable business results. While teams generate ideas, analyze cost structures, and benchmark competitors, the connection between analysis and implementation often remains weak.
At the same time, external pressure continues to increase. Global supply chain disruptions, rising material costs, and intensified competition make it more difficult to maintain margins through isolated cost-cutting measures alone. As a result, companies are required to make more informed cost and value decisions earlier in the product lifecycle – where the largest impact on overall cost and profitability is defined.
This creates a structural challenge: organizations may understand individual cost drivers, but often lack a consistent link between engineering design, cost structures, and customer value. Without this connection, cost initiatives risk remaining fragmented and fail to deliver the expected impact.
Why do cost reduction initiatives so often fail to deliver real impact?
How does FEV Consulting help turn cost insights into lasting value?
FEV Consulting supports companies across the full Cost & Value Management lifecycle – from early product decisions to implementation and organizational setup. Depending on the project phase, different levers are used to ensure that cost and value decisions are consistently translated into measurable results.
Target costing & concept decisions
In early concept phases, FEV Consulting supports the evaluation of technology options and defines realistic target costs. By linking technical concepts with cost implications, companies can make informed decisions before costs are locked in and avoid costly redesign loops later in the process.
Cost transparency
FEV Consulting provides detailed, bottom-up cost transparency at component and system level. Using engineering-based cost models and data-driven insights, teams gain a clear understanding of cost structures and cost drivers – enabling fact-based decisions throughout development, sourcing, and industrialization.
Cost reduction
During development and after start of production, FEV Consulting identifies and prioritizes cost reduction levers with a strong focus on feasibility and implementation. The objective is not only to generate ideas, but to ensure that cost reduction measures are translated into measurable savings.
Design-to-value
FEV Consulting links product features with customer value and willingness to pay, especially in early and mid development phases. This allows companies to differentiate between cost-driving features and value-creating features and to make better trade-off decisions.
CVM organization, digitalization & implementation
FEV Consulting builds and improves Cost & Value Management capabilities through optimized processes, governance, digital tools, and AI-driven approaches – creating sustainable impact across the product lifecycle.
What kind of impact can companies expect?
FEV Consulting combines technical expertise, benchmarking data, and structured methodologies to create measurable results across product and organizational levels. Typical project outcomes show a clear pattern in both scale and impact:
- 0+validated cost reduction ideas in individual large-scale projects and complex product systems
- 0%+validated cost reduction potential in complex products and system-level optimization programs
- 0xreturn on project investment achieved in selected client engagements
- 0%+reduction of manual work realized in many organizational transformation projects
Case samples
How does Cost & Value Management work in practice?
Cost reduction program for a passenger car OEM in EV battery development
A global passenger car OEM engaged FEV Consulting because its next-generation high-voltage battery was at risk of missing target cost ahead of SOP. FEV Consulting conducted a comprehensive design review across all battery systems, combined with a full should-cost analysis and benchmarking against market alternatives. Based on this assessment, more than 60 cost reduction opportunities were identified, detailed in structured idea sheets, and classified into quick wins, mid-term measures, and next-generation actions. Overall, the program identified a cost reduction potential of more than 15%, supported by a costed BOM and a structured evaluation of implementation effort, risk, and savings potential.
Target costing support for a commercial vehicle OEM in early BEV development
A commercial vehicle OEM engaged FEV Consulting during early BEV development to define and monitor target costs across the vehicle. FEV Consulting developed an initial cost forecast, broke it down to subsystem level, and continuously refined it throughout development. The analysis covered more than 200 subsystems and enabled early alignment of product design and cost targets. This enabled to steer cost proactively instead of reacting in later phases.
Inverter design improvement and cost reduction
FEV Consulting supported the optimization of a high-voltage inverter by combining design review, DFMA analysis, and cost assessment. The project identified more than 20 cost reduction ideas and around 40 design improvement opportunities, including five prioritized quick wins. For selected areas such as final assembly, a cost reduction potential of up to 40% was identified. The outcomes were structured into concrete actions for implementation.
Cost & Value Management organization and digital transformation
A global OEM engaged FEV Consulting to improve its Cost & Value Management capabilities after recurring issues in meeting cost targets across multiple programs. FEV Consulting analyzed the existing setup and identified gaps in processes, ownership, and tool landscape across engineering and cross-functional teams.
Based on this, a target operating model for CVM was defined, including structured processes, clear roles and responsibilities, and the integration of digital and AI-supported approaches for cost modeling and tracking. The transformation program included more than 10 dedicated workshop streams and involved over 30 stakeholders from engineering, purchasing, and management functions.
The project resulted in the development of a structured CVM framework, including refined role models, make‑or‑buy approaches, and the definition of methods, tools, and AI use cases to support cost engineering activities. These elements were consolidated into a clear set of implementation measures and translated into a detailed two‑year transformation roadmap for the organization.
Design to Value optimization for a passenger car OEM during product definition
A passenger car OEM engaged FEV Consulting to improve product competitiveness during concept development. FEV Consulting developed and evaluated alternative product concepts, linking technical design options with cost structures and customer value, and structuring trade-off decisions between performance and cost.
The project generated more than 80 cost reduction and value optimization ideas, of which 41 were prioritized for implementation. Based on the prioritized measures, a cost reduction potential of approximately 7–11% for short- and mid-term actions and up to 20–30% when including long-term concept changes was identified.
This enabled the definition of a more competitive product concept with an improved value-to-cost ratio. By aligning product features more closely with customer value and willingness to pay, the project supported higher profitability, a stronger market fit, and a more resilient product concept. Based on this, two alternative product concepts were developed and evaluated as part of the final decision-making process.
Reducing cost is not the same as improving profitability - what matters is how design decisions impact both cost and customer value.
Frequently asked questions
FEV Consulting’s Cost & Value Management links product design, cost structures, and customer value to enable better product decisions. Unlike isolated cost analysis, it connects engineering, commercial, and customer perspectives to ensure that decisions are both technically feasible and economically viable. In practice, this includes structured cost modeling, benchmarking, and decision-making processes across the entire product lifecycle.
Cost reduction focuses on lowering cost, often in later development stages. Cost & Value Management takes a broader view by considering how design decisions affect both cost and customer value. This means FEV Consulting evaluates trade-offs between performance, features, and cost to ensure that cost reductions do not negatively impact product competitiveness or margins.
Cost & Value Management should ideally start in the concept phase, where most of the product cost is defined. Early decisions on product architecture, technology, and specifications have a lasting impact on cost and profitability. Applying CVM in later stages remains valuable but typically focuses on optimization rather than fundamental cost steering.
Typical deliverables of an FEV Consulting Cost & Value Management project include detailed cost breakdowns, identification of key cost drivers, target cost definitions, and prioritized cost reduction measures. In addition, projects often result in structured implementation roadmaps and decision-ready business cases. Depending on the scope, digital tools or dashboards may also be introduced to support ongoing cost monitoring.
By providing bottom-up cost transparency and should-cost models, FEV Consulting’s approach enables fact-based discussions with suppliers. This helps identify cost gaps, validate supplier quotations, and define realistic pricing structures. In addition, understanding cost drivers allows companies to focus negotiations on the most relevant components and processes.
A key focus of service lies on translating analysis into execution. This includes prioritizing ideas based on feasibility and impact, defining clear ownership, and establishing structured tracking mechanisms. In many cases, organizations also require improved processes, tools, and governance to ensure that cost reduction measures are consistently implemented and not lost in isolated initiatives.
FEV Consulting links product features with customer value and willingness to pay through a holistic design to value approach. This allows companies to identify which features create real differentiation and which primarily drive cost. Based on this, products can be specified in a way that balances cost efficiency with market attractiveness, rather than focusing on cost reduction alone.
Digital tools and AI improve efficiency and transparency in Cost & Value Management processes. They support cost modeling, data integration, benchmarking, and tracking of cost initiatives across teams and projects. By enabling faster analysis and more consistent data usage, FEV Consulting helps companies scale CVM approaches and improve both decision-making and implementation.
Get in contact
with our team
Benjamin Knobloch
Director and Expert in Costs & Value Management
Christian Speuser
Director and Expert in Benchmarking
