Engineering Products and Services ~ Applying the 80:20 principle

Engineering Products and Services for markets are a challenge and when being created the application of the 80:20 principle comes into great effect.

From a perspective of Cost: (80% Cost from Analysis to Installation)
40% ~ Analysis & Design
20% ~ Production
20% ~ Testing, Integration & Installation
20% ~ Maintenance

Maintenance generates the largest % of Revenue through "Services" and Product Evolution.

The companies and industries that have continued to adapt and thrive have successfully applied these principles.

a. The Software industry: Creates Software Products and Revenues through AMCs/ Support & Versions. For example Printer manufacturers generate revenue through aftermarket sales, support and sale of cartridges

b. The A&D industry: Aircraft & MRO/Spare Parts

c. BFSI: All products follow these principles whether it be credit cards or home loans
or insurance plans

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z. Entertainment: A Serial with Episodes that run for years

Even personal care products like shaving and razors either the blades or disposable follow this principle. Creation of Products & Product Lines that evolve overtime and are executed to be profitable and sustainable from a business perspective.

Exceptions are rare if any. Those products that need no maintenance or development and evolution thereafter have from history played into the Darwinism of their industry leaders who have followed these simple and basic principles of the Business of Engineering.

Thus creating products and services for the BOP and emerging economies will have to follow these principles but the business models to deliver these products and services will have to be based on "Micro-everything" and modeled to be managed to deliver Economies of Scale and Scope. From “daily-wage” economies to “community-capital” based products and services. What the BOP needs are simple principles with bottom-up economics.