How to Save Money with Product Benchmarking: A 5-Step Guide

Product benchmarking is one of the smartest ways to cut costs. It’s not rocket science. In fact, it’s surprisingly straightforward.

Many companies shave 20% off their production costs just by following this process.

Here’s how You can do it too—and yes, it’s as practical as it sounds.

Step 1: Identify and Buy Competitive Products

Let’s start with the obvious - You need to know what’s out there.

Take a good look at what competitors are offering. Browse supplier catalogs, talk to team, and dig into the market.

Once you’ve got your shortlist, buy those products and prepare to dive in.

Here’s a tip: don’t just go for the big names. The small guys often have the most interesting ideas hiding in plain sight.

Activities to Perform:

• Research competitor products through supplier catalogs, market reviews, and management insights.
• Use feedback from customers or stakeholders to identify relevant products.
• Purchase competitive products for analysis.

Deliverables to Produce:

• A prioritised list of competitor products for benchmarking.
• Procured products ready for teardown and analysis.

“I remember once dismissing a smaller competitor as irrelevant. Big mistake. When we benchmarked one of their products, we found a material they used that reduced costs by 15%. It changed how we looked at sourcing entirely.”

The lesson?

Don’t overlook anyone.

Great ideas are everywhere.

Step 2: Create a Data Collection Template

Now it’s time to organise.

Break the product into parts—materials, components, assembly process. Create a simple template to keep track of everything You’ll analyze. Think of it like your treasure map for cost-saving opportunities.

Miss something here, and You could overlook biggest potential win.

Templates save time, sanity, and, frankly, Your reputation when someone asks, “Did you check that?”

Activities to Perform:

• Identify key features and components to analyse, focusing on cost-driving elements.
• Develop a standardised data collection template for consistent documentation.
• Collaborate with team to refine the template and ensure all aspects are covered.

Deliverables to Produce:

• A detailed, reusable data collection template.
• A checklist of key product attributes to examine during the teardown.

Step 3: Tear Down the Products

Now the real fun begins.

Grab tools, assemble team, and start taking those products apart. Carefully document every detail—what materials are used, how the product is assembled, what stands out.

This is where surprises happen.

Activities to Perform:

• Schedule and conduct teardown workshops with your team.
• Disassemble the competitive products, documenting materials, designs, and processes.
• Photograph or sketch each stage of the teardown for reference.

Deliverables to Produce:

• Detailed teardown notes with photos, sketches, and descriptions of components.
• A library of insights about competitor designs and materials.

“During one teardown, we found a tiny design tweak in a competitor’s product that cut assembly time by 20%. It was so simple we almost laughed, but it made a massive difference in production efficiency.”

A teardown isn’t just about data - it’s about discovery.

Every nut, bolt, and widget could be the key to your next breakthrough.

Step 4: Analyse the Design and Features

Once you’ve got your teardown notes, it’s time to compare.

How do their designs stack up against yours?

What’s adding unnecessary costs?

Which features are clever and efficient?

This is where the magic of benchmarking kicks in.

Activities to Perform:

• Review and compare competitor designs against own product offerings.
• Focus on identifying features that impact functionality, cost, or efficiency.
• Engage team discussions to brainstorm potential improvements or adaptations.

Deliverables to Produce:

• A comparison report outlining differences in design, features, and costs.
• A list of actionable insights for improving your product or processes.

“While analysing two designs, we noticed one used a modular approach that made repairs easier and cheaper. We adopted a similar idea and saw immediate results - not just in cost savings but in customer satisfaction.”

Good ideas are meant to be shared - or borrowed, as long as You improve on them.

Step 5: Identify Cost-Saving Opportunities

Now comes the payoff.

Take all that data and turn it into action. Where can You cut costs without cutting corners? Focus on changes that have the biggest impact.

Share your findings with team or suppliers, and get to work.

Even small changes add up fast.

Activities to Perform:

• Prioritise cost-saving opportunities based on impact and feasibility.
• Present findings to stakeholders and suppliers to align on next steps.
• Implement changes and track the results.

Deliverables to Produce:

• A prioritised list of cost-saving opportunities with recommendations.
• A plan for implementing improvements and tracking savings.

“After benchmarking a competitor’s product, we switched to a simpler packaging design and cut costs by 10%. It wasn’t flashy, but it saved thousands of dollars every month.”

The best cost-saving ideas are often the ones hiding in plain sight.

Why Benchmarking Works

Benchmarking isn’t just about saving money. It keeps you competitive. Companies that benchmark regularly don’t just survive - they thrive.

The process pushes to innovate and adapt faster.

“When we first started benchmarking, it felt like extra work. Now it’s second nature. One time, we consolidated suppliers based on benchmarking insights and saved both time and money. That’s when we knew we were onto something.”

The more You do it, the easier it gets.

Think of it as a habit, not a project.

Quick Tips for Success

• Use tools and software to make data collection easier. It’s 2024—don’t do this manually.
• Get input from engineers, designers, and procurement team. Fresh eyes see fresh opportunities.
• Keep up with industry trends. Innovation doesn’t wait.

Final Thoughts

Product benchmarking works. It helps cut costs, improve products, and stay ahead.

Start with one product and see where it takes You. Even small steps can lead to big results.

Ready to get started?

I’d love to share what I’ve learned along the way.