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Company Overview Company Overview

Product Costing

Introduction:

Our Should Costing Service is a value added solution for organizations that do not have resources to conduct a detailed product cost analysis in-house. Our emphasis is to determine the most cost-effective and efficient materials and manufacturing processes for a product. Our experienced engineers provide Best in Class costing solution which would help companies to position their product well in the market. The demand for Should Costing can come either from external customers/competitors or their own organizations.

Why it is so important:

In today’s competitive business environment, it is very essential to have a holistic approach to cost. This approach would help to reduce the overall cost not just the Product cost alone. It is imperative that the product costing is important for a business’s survival.

Benefits to customer:

  • Product cost reduction through optimization of – Product Design, Mfg technology & assembly process, Supplier negotiations
  • Reduction of Product Development Lifecycle
  • Standardized cost models across all commodities /locations
  • To find new avenues for improving design efficiency and profitability
  • Increased manufacturing throughout, streamlined logistics and faster delivery

Satven Experience:

Satven Engineers have expertise in using costing tools like Design For Manufacture and Assembly (DFMA®) from Boothroyd Dewhurst Inc. and customized Excel based costing tools. We have dedicated teams for carrying out Costing programs for various customers from Tier 1 suppliers.

Satven Team is helping customers in identifying the Cost Saving Opportunities at Three levels – 1. Supplier stage 2. Product stage 3. Product Conceptual stage

  • Supplier Stage:

    The immediate Saving Opportunities can be found by doing cost studies of parts that are currently being purchased from existing supply chain. The Should-Cost approach would be invaluable when purchasing team need to work with suppliers. Purchasing and supply chain management will have an added advantage when they are provided Costed bill of material with a background of costing mechanism. The part description along with a breakdown of what the setup, material, process and tooling costs should be, would help the purchasing engineer negotiate better terms with the supplier.

  • Product Stage:

    The next level of Saving Opportunities can be found by examining the Should-Costing of current production parts. The saving potential can be enhanced further by selecting the optimal material and manufacturing process for each part in the existing design. The Should-Cost exercise would help in thorough understanding of the primary cost drivers associated with manufacturing the existing product – and establish a benchmark for what the current product “should cost.” The cost models would guide through an assessment of alternative processes and materials and provide cost information for the bill of material. Costs update automatically as and when there is a change in tolerances, surface finishes and other part details. Gradually this would help to optimize the product cost.

  • Product Conceptual Stage:

    When Should-Cost models are applied at the early stages of next generation product development, it has the highest potential for cost savings. During the early stages of design, control of part count is paramount to attain the cost targets. Product simplification can be achieved by focusing on part count and part count reduction. This analysis allows designers to determine the theoretical minimum number of parts that must be in the design for the product to function as required. When you identify and eliminate unnecessary parts, you eliminate unnecessary manufacturing and assembly costs, along with “downstream” costs associated with warranty and service, engineering change orders, and utilization of factory floor space.