In the context of the integration of traditional craftsmanship and modern technology, this paper explores the path of industrial design innovation. Taking the iron drilling project of Baoji Petroleum Machinery Co., Ltd. as an example, it solves the problems of design evaluation and optimization, and enhances the competitiveness of product innovation. Using the key structure and process of the original product, generate three design schemes. Invite 20 professionals to score based on 12 indicators and establish a decision matrix. By combining the Analytic Hierarchy Process and Entropy Weight Method to determine the weights of indicators, and using the Grey Comprehensive Evaluation Method, the Grey Weighted Correlation Degree is calculated through the evaluation process and steps, and the optimal scheme is ranked and checked for consistency. The experimental results show that for the three design schemes A1, A2, and A3, A2 has the best overall performance in terms of operational convenience; In terms of safety, A2 design is superior; In terms of reliability, the gap between the three plans is small; In terms of innovation, A2 stands out with its highlights. Overall score, A2 (0.3720) is the highest, followed by A3, and A1 is the lowest. Compared with traditional methods, the proposed method has a higher A2 score, which verifies its effectiveness. The method proposed in this article can provide an effective path for the innovation and development of industrial design. After optimization design, the selected A2 scheme has significant advantages in enhancing product innovation competitiveness.