Human Resource

Frugal Engineering —The concept of developing innovative, no-frills products at the lowest cost possible. Eg – TATA Nano $2,500 price tag that targets price-conscious customers, is the poster child for frugal engineering.

What is frugal re-engineering

Defined as a Structured, Sustainable process of continually redesigning products to cut costs Cost-effective is a continuous improvement in manufacturing of a product

For example, plastic parts can be redesigned to be made of polypropylene instead of costlier fiber-reinforced plastic, and low-temperature specs can be relaxed for window-channel grease in temperate regions that don't have harsh winters

Frugal re-engineering builds on the concepts of value analysis, value engineering (VAVE). It encompasses the strategic imperatives of an empowered organization supported by processes, metrics, tools, and systems. It enables companies to continually reduce costs in a structured manner

Frugal re-engineering borrows from the Indian concept of "jugaad." Indian entrepreneurs, using parts from junkyards, have been known to create their own local transportation to fill the void in low-cost vehicles. It is comparable to grassroots innovation that uses ingenuity to solve a problem at a minimal cost.

Techniques used by these innovators to develop cost-effective solutions

* Align your cost reduction strategy to the overall business strategy. If material cost reduction is not articulated as a strategic objective and managed as a whole, those charged with reducing costs will struggle to push ideas through the system.

* Link multiyear cost reduction plans to objectives at the business-unit level. Frugal re-engineering ideally should translate into actionable targets for business units so that managers can integrate them with their business plans. When targets are regularly reinforced, frugal re-engineering objectives become an integral part of multiyear plans. An industrial goods company that broke down its...