Most companies are cost optimizing a very small percentage of the products they design, manufacture and sell. There are simply not enough resources available to cost the large numbers of new parts moving through the organization. Those companies that have dedicated cost engineering teams focus on the most expensive, highly engineered parts and do not have the time to analyze the moderately engineered parts. It is not uncommon for aPriori to visit a multi-billion dollar, global manufacturer with a well established cost engineering program, and hear that they optimize only 20-25% of all the parts they design. Think of how much absolute dollar cost savings opportunity is available if you could cost optimize upwards of 50-75% of your product designs before they went into production.
This is an issue of THROUGHPUT. There simply are not enough human resources to check each and every part before it is committed to production. This condition is compounded by a lack of manufacturing and cost estimating expertise that permeates many companies today, especially those that outsource a lot of their subassembly design and manufacturing to suppliers. And finally, the technologies currently in use within companies that do have a cost engineering team tend to be driven through manual input. Again, this approach requires a high degree of expertise in costing and manufacturing, and it may work fine for a small number of sophisticated components. However, it is certainly not scalable across thousands or even hundreds of thousands of parts flowing through a product development organization on an annual basis.
The good news is that this problem can be solved through the application of an advanced technology that effectively places a Cost Engineer on the desktop of each and every person on your Product Team. Whenever a designer, engineer, sourcing specialist or manufacturing engineer needs to understand the cost implications of a trade-off decision, imagine that they could generate a highly detailed piece part, product assembly and/or tooling cost estimate with the push of a button. This system would allow the knowledge and wisdom of your cost engineering team to be amplified across the entire corporation. It solves the THROUGHPUT problem and it solves the expertise problem at the same time.
aPriori’sEnterprise Product Cost Management platform features an automated costing capability thatis highly unique, and enables customers to significantly increase the percentage of cost optimized parts. Out of the box, aPriori includes an extensive selection of highly developed manufacturing process cost models that can easily be configured to match your company’s own material costs, labor and overhead costs and manufacturing preferences. aPriorialso delivers a unique technology as part of its core cost engine that leverages Geometric Cost Drivers already built into the 3D CAD models your design team creates every day. This greatly simplifies and accelerates the costing process by automating the generation of inputs for a cost estimate. Moreover, aPriori’s intelligent routing engine automatically evaluates all the feasible ways a part can be made,and selectsthe manufacturing routing that is least expensive.
These technical advantages enable aPriori to be used by a wide variety of end user types. Not just cost experts – but design engineers, sourcing professionals, and manufacturing engineers to name a few. aPriori’s Automated Costing solution is often applied to use cases such as Design to Cost, Costing of Design Alternatives and ECO Costing. For folks in Sourcing, aPriori is often used for Outlier Analysis or Quote Checking on moderately engineered parts. This delivers enormous value to sourcing teams by providing detailed cost data for fact-based negotiation with suppliers on outsourced products. Finally, aPriori’s Automated Costing solution can be used by Cost Engineering and Manufacturing teams for costing of highly complex products, collaborating with engineering and sourcing, negotiating with Strategic Suppliers or developing more accurate Time Standards.
aPriori can also provide a method to batch cost production parts and identify outliers where you may be overpaying your suppliers. Imagine setting up a directory with several hundred or even thousands of parts, configuring some basic information within aPriori about how much you are already paying your suppliers for those parts, and heading home for the evening. When you come in the next morning, you pour yourself a cup of coffee, open up aPriori and “presto”, all the work has been done for you! You are very quickly able to identify that out of several thousand parts, there are some percentage of outliers where you are overpaying your supplier by 50%, 75% or even more. Again, this is possible due to aPriori’s Automated Costing capability, a unique system feature that is simply not available with any other product costing solution on the market today. aPriori has customers that have identified hundreds of thousands, even millions of Euros of savings using this capability in just 1 or 2 exercises. Imagine if you could run this capability against all your sheetmetal brackets, plastic parts, or all your castings or machined parts? This could help your sourcing team not only meet, but easily beat your annual cost reduction goals.
THROUGHPUT is a critical consideration that you should evaluate very seriously if you are thinking about implementing a Product Cost Management system across your enterprise. If the system does not provide you with an Automated Costing capability, built into the core platform of the system; if it cannot easily read and calculate a should cost via a batch mode capability, think twice about moving forward. Instead, contact aPriori, and ask for your own private demonstration about how aPriori can help you increase the THROUGHPUT of cost optimized parts in your organization. For more information, contact us at ProductCost@apriori.com.