Introduction. The introduction of Industry 4.0 technologies and the strengthening of trends towards product customization lead to a fundamental change for the consumer in the importance of the functions of industrial products. The article provides an overview of approaches to the allocation of product functions and concludes that a new classification of functions with the allocation of basic and optional functions is necessary, as well as a separate consideration of control and supporting functions and cost accounting for a complex consumer characteristic. Data and methods. The theoretical and methodological basis of the research was the works of domestic and foreign scientists devoted to the application of the Value Analysis method and the Value Engineering method of high-tech products, as well as research on trends in customization and production digitalization. Approbation of the approaches proposed in the article was carried out on the example of the development of a high-rise stacker. To highlight the basic and optional functions, we used the methods of surveying consumers of various segments and determining a competitive price. To construct functional maps, the methods of economic and statistical analysis, the method of expert assessments were used. Results. The proposed modernized approach made it possible to reduce the cost of the basic configuration of the product by 50 thousand rubles by identifying and excluding optional functions. The developed author's classification of functions, as well as the stepwise costs allocation algorithm for a complex consumer characteristic, provided a more accurate determination of mismatch points and directions for reducing costs while meeting the necessary quality requirements. Conclusion. Research results can be used as a scientific and methodological basis for the design of functional models when carrying out a functional-cost analysis (engineering) of technically complex products.