In today's buyer driven market it is critical for all the OEMs and their suppliers to reduce product cost & cycle time to maintain their competitiveness. Product companies across several industries face significant challenges with respect to pricing their product while maintaining the internal profitability targets. Their objective is to reduce part costs and increase product reliability.
Cost modeling becomes imperative in order to understand:
- Theoretical baseline
- Realistic estimate
- Spend analytics
- Benchmarking with competing products
- Controlling levers for optimization
Should Costing is a scientific, objective method to arrive at the right price to manufacture or procure a product, with given features and quality, at a given geographical location using optimum handling & manufacturing processes. It is a process, whereby product manufacturers can determine the cost of the part or product, based on the raw materials used, manufacturing costs and overhead production costs.
Tech Mahindra’s Should Costing Solution
Tech Mahindra’s Should Costing practice is a fully matured practice. We have thorough understanding of the cost drivers associated with manufacturing of products and we can ascertain with high level of accuracy what a product should cost regardless of the geographies of manufacturing or assembly. We add value in complete product development life cycle right from concept to roll out stage.
We have saved hundreds of USD millions for our customers through Should Costing Solution implementations at various stages of Product development life cycle across Aerospace, Automotive, Energy, Consumer, Hi-tech and Industrial Products. Many of our Fortune 500 customers have realized significant cost optimization through comprehensive, standardized should costing solutions from Tech Mahindra.
Our expertise spans across software tools like DFMA, Costimator, SEER Galorath and aPriori. Our understanding of client’s manufacturing resources, raw materials and design details helps in arriving at a realistic cost of components / products. Our partnership with application major SEER Galorath, enables us to address client’s pain points in a real time manner thereby reducing cycle time by a significant amount.
Our Should Costing services include:
- Target costing
- Deciding the low cost country for manufacturing location
- Optimizing manufacturing process
- Cost analysis
- Tear Down , Benchmarking of competitor’s products
- Price negotiation
- Vendor Development & alternate vendors
- Product sustenance
- Valuable inputs for Value Engineering
- Identify and eliminate inefficiencies in manufacturing processes
- Identify cost reduction opportunities in the supply chain
- Make vs Buy decisions by providing sourcing alternatives
Unique features of our Should Costing practice
- Comprehensively analyses MFG processes, methodologies, technologies for possible optimization ( i.e. Labour, Cycle time)
- Takes care of various costs across the supply chain
- Readily available templates and specific to various Industries, Sub systems and Components
- Knowledge base and matured processes, methodology for Should Costing resulting in most accurate cost estimates
- Strong global database of materials, man power rates and work center rates
Learn how Tech Mahindra’s Should Costing Practice can help you arrive at a realistic cost of components / products, add value to the complete product development life cycle right from concept to roll out stage. For more information on Should Costing Solution implementations, email us or contact us here