At KEVOS, we believe in learning from the best, and today we’re sharing key business lessons from Dr. Arokiaswamy Velumani, MD & Chairman of Thyrocare Technologies Ltd. His approach to cost control and pricing disruption is a remarkable model for any business, including ours in engineering design and drafting. Let’s break down some of the key takeaways. ### Product Price vs. Product Cost In any business, **Product Price** and **Product Cost** are two key pillars. You can only price your product right if you truly understand and control its cost. Before entering the laboratory testing industry, Dr. Velumani identified an industry-wide inefficiency: vendors charged labs Rs. 100 for a test that cost Rs. 5, and labs then charged the customer Rs. 500. Dr. Velumani disrupted this pricing model by charging Rs. 100 instead of Rs. 500—this not only increased **volume**, but also **confidence** and **network growth**, which eventually made Thyrocare a household name. ### Control Costs and Keep Prices Low Dr. Velumani emphasizes that keeping your product price low can make a huge impact. While companies with high prices often fail due to uncontrollable costs, businesses with competitive pricing tend to thrive. Controlling costs isn’t just about knowing your own expenses—it’s about understanding your **vendor’s costs** too. As Dr. Velumani put it: > "If you know Cost of Goods Sold (COGS), you can do business. But if you know the COGS of your COGS (i.e., the cost of your vendor’s goods), you can bring disruption." This insight means that to reduce prices and stay profitable, you must fully understand the costs at every stage of your supply chain. ### Bundling Services for Greater Value One of the ways Thyrocare lowered costs was by introducing a "buffet system" of bundled tests, offering packages like Aarogyam at a much lower cost. By grouping tests together, Dr. Velumani could perform additional tests at a marginal increase in cost, passing on that savings to the customer. For example, a Rs. 3,000 package can run 115 tests, providing substantial value to customers, and retaining them for repeat business. It's not just about providing service; it’s about **optimizing resource usage** to maximize efficiency. ### Finding Your Niche: Preventive Care While most laboratories target sick patients (a small percentage of the population), Thyrocare identified a much larger market—people seeking **preventive care**. By focusing on this segment, they expanded their customer base and created a recurring revenue model. This principle can apply to any industry. At KEVOS, for instance, we target not just large-scale engineering projects, but also those looking for innovative, efficient, and sustainable solutions—customers who are planning for the long term. ### Smart Cash Flow Management Dr. Velumani also found creative ways to manage cash flow. Thyrocare franchisees pay Rs. 1 lakh upfront and receive Rs. 50,000 in credit. This negative working capital model allows Thyrocare to invest its franchisee’s money in the business, avoiding bank loans and reducing risk. For a business like KEVOS, managing cash flow efficiently means ensuring we always have working capital to fund new projects, without taking on excessive debt. ### Maximize Asset Utilization Dr. Velumani highlighted the importance of **utilizing machines to their fullest**. He argues that a machine that runs for just 2 hours a day is a liability, while a machine running 22 hours becomes an asset. The takeaway here is simple: increase volume to maximize the use of your resources. This lesson applies directly to KEVOS, where efficient use of our CAD tools, manufacturing technology, and personnel is crucial to scaling operations. Running three shifts might be a manufacturing concept, but in design and engineering, it means constantly pushing our capacity to handle more projects without increasing overhead. ### Key Takeaways for KEVOS and Other Businesses: 1. **Understand Your Costs:** Know the costs of your goods and services—and those of your suppliers. 2. **Keep Prices Competitive:** A lower price attracts volume, and volume is where profitability lies. 3. **Optimize Resources:** Bundle services to maximize efficiency and customer value. 4. **Focus on the Right Market:** Find the underserved segment and provide long-term value. 5. **Manage Cash Flow Wisely:** Secure working capital creatively without taking on debt. 6. **Maximize Utilization:** Keep your assets—whether machinery or tools—working at full capacity. Dr. Velumani’s strategy of cost control, pricing disruption, and maximizing volume helped Thyrocare dominate its industry. At KEVOS, we aim to adopt similar principles to deliver the best in engineering design while maintaining sustainable and competitive pricing. If you'd like to explore how we can bring innovative design solutions to your next project, get in touch. We're ready to work with you to engineer a future that works better for everyone. — Team KEVOS