How to Save Big with Product Benchmarking in Procurement

How to Save Big with Product Benchmarking in Procurement

Product benchmarking might be the best-kept secret in cost savings.

It’s straightforward, not rocket science, and it works.

By comparing products, you can cut costs, improve designs, and stay ahead of the competition.

Companies that use this process regularly save up to 20% on costs.

That’s not pocket change—it’s game-changing.

Here’s how to make it happen, step by step.

Step 1: Find and Buy Competitor Products

Start by figuring out what products to compare.

Talk to suppliers, check catalogs, and see what others in your industry are using.

Don’t just look at the big names—smaller competitors can surprise you. Sometimes they’re scrappier and more creative because they have to be.

I learned this the hard way.

Once, we almost ignored a smaller competitor because we thought, “How much could they teach us?” Turns out, a lot.

One of their design features ended up cutting our costs by 15%.

That one insight changed everything for us.

So, cast a wide net.

Once you’ve got your list, get your hands on those products. Borrow, buy, beg—just make sure you have access.

Step 2: Set Up a Template to Collect Data

Once you’ve got the products, it’s time to get organised.

Break everything down into parts—materials, design, manufacturing processes. Use a checklist or template to make sure you don’t miss anything.

Trust me, a good template saves you headaches later.

And don’t just look at the obvious stuff.

Sometimes the smallest details—the kind you don’t think twice about—are the ones that drive up costs. A single overlooked material choice or process step could be eating into your margins.

Take the time here to get it right.

You’ll thank yourself later when you’re comparing apples to apples (or bolts to bolts).

Step 3: Take the Products Apart

Here’s the fun part: the teardown.

Grab your tools, gather a solid team, and get to work. Pull everything apart piece by piece, and don’t stop until you know what makes it tick.

Document everything. Seriously—everything. The smallest detail could lead to your next big idea.

Once, during a teardown, we found this ingenious little fastening system.

It was so simple we almost laughed, but it cut assembly time by 20%. That single discovery made us rethink our own design.

This is why tearing things apart (literally) is worth it.

Take your time.

Skimming over details here can cost you big opportunities later. And honestly, if you’re going to spend the time tearing something apart, you might as well do it right.

Step 4: Compare What You Found

Now it’s time to put the pieces together.

Line up everything you’ve documented and start comparing. Look at the materials, the processes, and the design choices.

What are they doing differently?

Are they cutting corners in a way that’s smart—or risky?

Are you overcomplicating things in your own design?

I remember one comparison session where we realised we were completely overengineering a key component. The competitor’s version was simpler, cheaper, and still worked just as well. When we simplified ours, the savings were immediate.

It was one of those “Why didn’t we see this sooner?” moments.

This is the step where you find out if you’re spending too much money for no good reason—or if there’s something genius you can borrow (or improve on).

Step 5: Find Ways to Cut Costs

Here’s the payoff.

Use what you’ve learned to make changes.

Could you switch to a cheaper material?

Redesign a part to make it simpler?

Find a supplier who does it better for less?

Now’s the time to prioritise those ideas and act on them.

After one teardown, we found out a competitor was using a different supplier for a key part. Their process was cheaper, faster, and just as reliable. Switching saved us 12% on that part alone. Small change, big impact.

Focus on quick wins first—those changes that save a lot with minimal effort. Once you’ve tackled those, move on to the bigger stuff.

Why Benchmarking Works

Here’s why this process is so powerful.

It saves you money, plain and simple. It also helps you build better products and make smarter decisions because you’re working with real data, not guesswork.

And when you walk into a supplier negotiation armed with insights from a teardown, trust me—they know you mean business.

Even more than that, it keeps you competitive.

By staying on top of what others are doing, you’ll always be one step ahead. Nobody likes playing catch-up.

Real-Life Wins

Want proof?

Here are a few real-life examples:

• A consumer electronics company redesigned a circuit board after benchmarking a competitor. They saved 18% on production costs.
• A car maker switched to lighter materials based on what they learned in a teardown. They cut vehicle weight by 15% without sacrificing safety.
• A healthcare company tweaked its packaging after analysing a rival’s design. The result? A 22% reduction in material costs.

These aren’t just nice stories—they’re real money saved, all from looking at the competition.

How to Start

This isn’t complicated.

Pick one product to focus on.

Assemble a team.

Tear it apart and document everything.

Even one session can uncover insights you didn’t expect.

Not sure where to begin?

Let’s talk. I’ve helped teams like yours uncover opportunities they never saw coming.

It’s easier than you think.

Final Thoughts

Benchmarking isn’t just about saving money. It’s about staying sharp, improving your products, and keeping your edge in a competitive market. The best companies do it regularly, and it shows in their results.

Could this work for your team? Let’s find out. You could be one teardown away from your next big breakthrough.

#Procurement #CostSavings #ProductBenchmarking