Chapter 4 - Engineering Perspectives

• Section 4.1 - The two types of engineering analysis
• Section 4.2 - Why cheaper is better
• Section 4.3 - How different countries design products

Section 4.2 - Why cheaper is better

Common sense would tell you a more expensive product is better than a cheaper one. In reality, the opposite can be true, i.e cheaper is better. There are several reasons why cheaper products are generally better. The first reason is due to the simple 80/20 rule.

Consider a 'perfect hi-end product' which has nearly every feature the most demanding customer needs. According to the 80/20 rule, 80% of the hi-end product's functionality can be achieved with just 20% of the cost of making the hi-end product. The most expensive part for the manufacturer is to produce the additional 20% of functionality beyond the 80% .

Why is this so? The reason has to do with economies of scale. 80% of prospective customers are satisfied with a product that has 80% of the features of the 'Perfect Product'. Therefore manufacturers are able to produce these products in mass and save enormously from volume discount and economy of scale. A robot welding a hundred identical car frames is a lot cheaper, faster and consistent than a human welding each custom car frame together by hand.

A second benefit of economys of scale is more consistency in the manufacturing process. A process that is done a few times is prone to variability in each step of the process. With variability comes inconsistency in the final product. Therefore consistency and repeatability of high volume processes results in a more exact product. A lot of hi-end products needs to have their hi-end features done manually by hand as the volumes are not there to justify the cost of automation. With manual processes you introduce far more error in each step, resulting in a higher probability of unacceptable defects.

The last and perhaps most important benefit of the 80/20 product is from a larger population of users. The more people using a product, the faster it can evolve. The fundamental principle of evolution states that evolution depends on the size of your population and time. A million people using your product will use and abuse it in ways never imagined by the designers. Feedback from them will result in enhancements and fixes that make future releases of the product far more robust and stable.

Now consider the market for the hi-end product. The population is far smaller, making it proportionally longer for them to test the product in extreme environments. Engineers are aware of this and consequently have to spend far more upfront time anticipating the situations their customers will use the high-end product. However, it is nearly impossible to predict the millions of ways your customers will use your product. Therefore unnecessary cost goes into designing a higher-end products which makes little difference to its reliability. Therefore higher-end products suffer from these ailments:

1. Unreliability due to variability in low-volume manufacturing processes
2. Unreliability due to smaller population of customers
3. Added cost due to no benefit from economy's of scale

Population is the most critical element of a succesful product design provided you listen to your customers. Unfortunately most engineers think that adding more complexity to their designs makes them 'better'. As explained , this just drives the cost up which lowers your population. Furthuremore it adds inconsistencies to your manufacturing process. So more complicated is not neccessarily better. There is a sweet spot between too simple and too complex.

A good example to illustrate this is Japanese versus German cars. Japanese cars can be considered to follow the 80/20 rule of manufacturing. Their cars are inexpensive to own and maintain and extremely reliable, but lack hi-end features. German cars on the other hand are considerably more expensive to own and maintain, less reliable, but do have features lacking in Japanese cars.

Obviously if you have no concern for reliability and money is no object, then by all means purchase the hi-end products. Sometimes you absolutely must have a hi-end feature, in which case you have no option but to purchase the hi-end model. If that is the case then just understand that you will likely experience less reliability and higher upfront and maintenance costs.

If the hi-end product is unable to justify it's higher cost with increased reliability then it has failed its design purpose. Unfortunately most hi-end products are little more than luxury items cleverly marketed as 'superior' products. When engineers add in features they do not realize it results in a smaller population and more inconsistent manufacturing process. The end result is you pay more and get less.

Unfortunately many manufacturers do not do a good job listening to their customers . You HAVE to listen to what the customers want ( even if you think it is stupid ), and not what you want to design. What engineers think is cool and what customers think is cool are two totally different things. I have often seen products where as an engineer I respect the effort it took to create, but it has no appeal to that type of customer.

For this reason many niche manufacturers are able to produce low-volume products for the connoisseur market. Since they do not have the beaurocracy of a large company, they are able to quickly adapt their products to their customer's needs. Their prices are higher than a mass-market brand, but their increased quality is well worth the price.

You also need to evaluate the market a product is designed for. For example, the average Walmart bicyle customer rides their bike no more than 70 miles. So their expectation is for it to last just 70 miles. An avid cyclist can easily ride 70 miles in one day, so their expectation is for a biycle to last tens of thousands of miles. A Walmart bike may be produced in far larger numbers than a professional bicycle, however, it will break down much faster since its customers have lower expectations.

It is unfortunate that the ignorance of consumers is a major factor in driving product quality down. The flip side is, a little knowledge about a product will guide you to higher quality but lesser known manufacturers. An ideal company would produce a hi-quality/ hi-volume/ low-cost product where features are entirely customer-driven. Sadly such companies are few and far between. Toyota is probably the only company coming close to this ideal.

We are blessed to live in a market with abundant choice of manufacturers and models. So next time you are shopping, do your research for these 80/20 products that offer core functionality at an affordable price and have a track-record of reliability. Seek out niche manufacturers and avoid mass-market brands. My rule of thumb is " If you don't know anything about the item you are buying then buy the second cheapest brand ! ".