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 process the large numbers of new part designs moving through the organization. Furthermore, most cost engineering teams are using either homegrown, excel-based costing solutions or commercial software that requires significant manufacturing expertise and manual input.
Even those companies that have dedicated cost engineering teams typically focus on just 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 cost savings is available if you could cost optimize upwards of 50-75% of your product designs!
This is an issue of throughput.
The good news is that this problem can be solved through the use of automated cost estimating technology that utilizes a common database. Automated costing technology enables the dedicated costing team to do batch costing of hundreds, even thousands of parts and isolate outliers for further investigation.
Furthermore, an automated cost estimating technology captures the intelligence of the expert cost engineering team and amplifies that knowledge to other members of the product team who need to quickly understand the cost implications of a trade-off decision. Elimination of cost drivers early in the design process significantly reduces the burden on the cost engineering team and dramatically increases the percentage of parts that are cost optimized at the company.
If you are interested in learning more about how aPriori automated cost estimating technology can help dramatically increase your throughput, contact us at ProductCost@apriori.com.