The mission
Pull from 4 unique data sources to evaluate costs at every Bill of Materials (BOM) level
- Request quotes from suppliers in RFIs
- Model parts in parametric costing tool
- Collect price benchmarks (internal & external)
- Leverage expert network insights
The challenges
- High accuracy for diverse parts: delivering high costing accuracy for a large number and variety of parts within a four-week timeframe.
- Comprehensive supplier engagement: faunching over 50 RFIs to effectively capture quotes from a wide range of suppliers (covering more than 80% of product cost)
The approach
- Catalog all parts and build a bill of materials structure
- Split BOM according to preferred costing source based on type of part (Make-to-specifications vs. Off-the-shelf)
- Reconstruct the cost of each part
- Compare costs with client assessment and identify first cost-reduction focus areas
The impacts
- Significant cost reduction potential: 18% assessed cost reduction potential
- Granular cost visibility: 800+ parts costed across all BOM levels leading to identification of first cost-reduction focus areas
Discover more about cost optimization methodologies.