To state the obvious, emerging markets have different needs than developed economies. Consumers in India are not looking for a stripped-down Buick that guzzles gas and is impossible to navigate. Massive MRI machines will not have an impact on the rural population of Brazil that does not have the means or ability to get to the healthcare facility where they are installed. Frugal engineering recognises this reality, and addresses the “billions of consumers at the bottom of the pyramid who are moving out of poverty in China, India, Brazil and other emerging nations,” write Vikas Sehgal, Kevin Dehoff and Ganesh Panneer in an article titled “The Importance of Frugal Engineering.” The piece, which I highly recommend, is published in the current issue of strategy+business.
To understand the concept of frugal engineering, it helps to understand what it is not, stress the authors. “Frugal engineering is not simply low-cost engineering. It is not a scheme to boost profit margins by squeezing the marrow out of suppliers’ bones. It is not simply the latest take on the decades-long focus on cost cutting,” write Seghal et al. Rather, it is an overarching philosophy that seeks to avoid needless costs in the first place instead of cutting existing costs. The poster child for frugal engineering is the Nano car from Tata Motors. It is not a stripped down version of an existing car but was designed and developed using a bottom-up approach. In the medical realm, GE has forged a frugal path with its low-cost handheld ultrasound scanner that is sold in developed markets. The device was designed in GE’s medical R&D lab in India using frugal engineering techniques, according to the authors.
Frugal engineering, in tandem with leapfrog technologies, is making the world a better place for the 4 to 5 billion people in the world that are unserved or underserved by the private sector. Find out how this philosophy is answering questions that too few global companies are asking by reading this provocative article.
Source : MedtechInsider