Free guide · PDFFor medical device manufacturers under margin pressure

Why most medical devices cost 20–40% more than they need to

The hidden engineering decisions that quietly destroy product margins — and the eight levers that give them back.

70–80%

of a product's cost is locked in before purchasing ever sees it — by engineering decisions, most made quickly, by people who were not thinking about cost.

A 20-minute read · 8 cost levers · 10 myths · 12-question readiness check · decision matrix

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What's inside

Twenty pages. No filler.

tune

8 cost levers

Ranked by what they actually return — with the three that never appear on a BOM.

quiz

12-question readiness check

Score yourself out of 24 with your actual BOM open, and read what the score means.

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Decision matrix

What to attack in your first ninety days, sequenced by regulatory drag rather than by size.

01 · Six months, three per cent

Good teams work the only lever they were given.

A product team spent six months asking suppliers for a 12% reduction. They achieved 3%. Two weeks later, an engineering teardown found 28% hidden inside the design.

Nobody in that room was incompetent. Purchasing negotiates inside a cost structure that engineering fixed years earlier — so when a CFO asks purchasing to take 15% out of a product, they are asking the one department that cannot deliver it.

The comparison nobody runs

Engineering redesign15–40%

Supplier negotiation3–8%

Same product. Same year. One of these conversations happens every quarter; the other almost never happens at all.

02 · Where the money actually hides

Most guides list five levers. Those are the last five.

The first three are where the money is, and they are the ones nobody looks at — because none of them appear on a bill of materials.

1Requirements10–25%

2Tolerances5–15%

3Architecture8–20%

4Materials5–15%

5Sourcing5–12%

6Process5–15%

7Assembly3–10%

8Packaging2–6%

1 · Requirements & over-specification — 10–25%

Every feature you inherited unexamined is a cost you inherited unexamined. If nobody can name the customer, the standard or the regulation, you have just found money.

2 · Tolerances & specifications — 5–15%

A tolerance is a cost, and most tolerances are copied rather than calculated. Tightening a dimension by a factor of two can double the machining cost of that feature.

3 · Architecture & part count — 8–20%

A part costs you its price, plus purchasing, inspection, inventory, a line in the device master record, a supplier to qualify and a failure mode to analyse.

03 · Worked example · Class B device, 8,000 units a year

₹7,250 → ₹4,050. A 44% reduction.

Margin under pressure from a tender competitor pricing 18% below. The instinct in the room was to demand 15% from suppliers. Here is what the teardown found instead.

Before₹7,250

Force sensor for occlusion — ₹1,100
Capacitive touchscreen — ₹2,200
Air-in-line sensor — ₹700
Machined aluminium chassis
3 brackets + 6 fasteners
Sole-sourced display driver

→

After₹4,050

Motor-current sensing — same spec
Rotary encoder — clinicians prefer it
Sensor removed — standard does not require it
Sheet-metal chassis
One moulded feature
Second source qualified

Same function. Same compliance. ₹3,200 less, on every unit, every year.

Illustrative worked example built from typical engineering economics, not an account of a specific client engagement. Numbers are indicative and volume-dependent.

04 · Also in the guide

The parts that change how you negotiate.

Ten cost myths and what each one actually costs you. A should-cost build-up you can copy. Cost-per-function analysis. The six-step teardown. And the section that costs us work — when not to run one.

check_circleShould-cost, line by line. A quotation is not a fact — it is an opening position.
check_circleCost per function, not per part. The worked case spends 30% of its BOM on looking modern.
check_circleSequence by regulatory impact. ₹690 ships next month and funds the rest.
check_circleThe ninety-day roadmap. Week by week, with the typical payback shape.
check_circleWhen not to bother. Five situations where a teardown is the wrong spend this quarter.