What does Across the Enterprise mean?
Different functions across the extended enterprise impact product costs during the product development and production delivery process. At different stages in the process, different functions have different amounts of impact on product cost. All of the following functions undertake activities and decisions that affect product costs:
- Design Engineering
- Production Planning
- Sourcing and Procurement
- Program Management
The design of a product, where and how a product will be manufactured, if and how a product will be sourced, and the production volume are all drivers of a product’s costs. The aPriori Product Cost Management software platform is used by all of these functions in the course of their daily work to reduce cost by Predictively understanding product costs in Real-Time before the product is launched.
How does aPriori support cost assessments Across the Enterprise?
Design Engineering – For new designs, aPriori can provide an early understanding of the costs of a particular design or a design element as needed by the engineers when they are making design trade-off’s. The aPriori Product Cost Management software platform integrates directly with the CAD system. While the Design Engineer is making design decisions, they can see the cost consequences of those decision in real time via the aPriori Cost Ticker.
Much of a product’s final cost (60-70%) is committed very early in the design process by the design decisions being made. Visibility to precise and predictive product cost assessments is necessary for Designers and Engineers to make the appropriate “cost informed” decisions that properly balance the Four F’s: Form, Fit, Function, and Finance. For re-designs, an understanding the cost of a design change is important to understanding the value/necessity balance of the change and whether it should be made at all. Finally, as different alternatives of a design are explored, cost comparisons can be made to determine cost effectiveness of each design alternative.
- Early understanding of the cost of a design or design element.
- Understand the cost of a design change.
- Explore design alternatives – to make cost comparisons
Manufacturing – Manufacturing engineers want to explore the costs associated with various manufacturing process alternatives to produce all or portions of a product. This includes exploring the cost impacts of various production facilities, processes, process parameters, process set-ups, and the production volumes. Through aPriori, the cost impacts of these process alternatives can be explored. Additionally, with aPriori, design changes proposed to the design engineer by manufacturing engineers can be evaluated by understanding their product cost implications.
- Explore costs associated with various processes
- Explore costs of alternative process set-ups and production volumes.
Production Planning – aPriori’s Virtual Production Environment (VPE) is a virtual model of your factory or your suppliers’ factories that contains information relevant to assessing the cost of products made in those factories. aPriori’s Product Cost Management Platform is able to utilize as many VPE’s as you have factories or suppliers. Once a VPE is built, it requires minimal maintenance and provides an instant cost (for internal factories) or price (for suppliers) of the part or assembly you are manufacturing in that factory.
- Explore cost alternatives of various routings
- Cost trade-off's based on production volume
Sourcing and Procurement - aPriori is uniquely suited to support the needs of Sourcing and Procurement. As stated before the aPriori Virtual Production Environments (VPE’s) are production facility models used to represent the manufacturing process capabilities and cost structures of different factories. The aPriori VPE’s can be used to represent vendor and supplier factories in a similar fashion as they would be used for internal production factories. Using VPE’s of suppliers’ factories Sourcing and Procurement personnel can predict and understand the prices associated with producing the product at each supplier. The results of these activities support early 'should-cost' estimates, alternative supplier analyses, and, ultimately, they can be used to facilitate make-buy decisions and support a fact-based negotiation process.
- Early should-cost estimates
- Early visibility to detailed process information
- Support make-buy decision
- Alternative supplier analysis
- Fact based negotiation support
Program and Project Management - For Program and Project Managers, understanding what the rolled-up cost predictions are for the many parts of a complex product is essential to understanding whether or not the product will meet its cost and profitability targets when it goes to production. aPriori provides a single enterprise cost management platform to capture and communicate product costs and product cost targets during the entire product development and delivery lifecycle to all those who can influence product costs. aPriori can provide predictive, real-time product cost roll-ups across an entire product, system, or program. Even if there are many individuals from different organizations and functions working on different components of a product and even if each of those components are at different stages in their product development and delivery lifecycle, aPriori can generate the predicted costs of the components and roll them up in a way that Project and Program management can understand. aPriori’s cost roll-ups show management if the program is on track to meet their product target costs and if necessary, can be used to drive decisions to reduce product costs.
- Communicate target cost during the product lifecycle
- Cost roll-up across the product, system, program
Why is providing product cost information Across the Enterprise so important?
Many different functional communities across the enterprise can and will impact product costs during the development and production delivery process. These product costs result from the many decisions being made by the different functions across an enterprise. Design decisions, manufacturing and planning decisions, sourcing and procurement decisions, program and product management decisions, etc. all influence product costs. The aPriori Enterprise Cost Management platform provides real time cost information to all of these functions so that they can avoid making decisions in a “cost knowledge vacuum”.
The advantage of the aPriori Product Cost Management software platform is that the determination of product costs is automated and updated in real-time, reflects the many decisions being made from design, manufacturing, sourcing, etc. and can be used by EVERYONE who impacts cost for maximum cost reduction.