Cost Engineering
Our core competence in cost engineering lies in Should Costing. "Should Cost" is the optimum cost a product "should" incur to a company considering the best available manufacturing & regional processes. It identifies all significant cost drivers and provides "Cost Insight" for essential decisions during sourcing and manufacturing. These insights comprise of material cost, process cost, overheads, and profit.
Why do companies need Should Cost Optimization?
Assessing true cost of a product requires detailed due diligence of material cost, manufacturing process, and logistics or delivery cost. This information along with the willingness of the market to pay on top as profit defines the true cost of the product.
Serve as a tool for supplier negotiation
Measure cost savings potential
Help in Make vs Buy decisions
Improve in-house productivity
How does should cost help in Supplier Negotiation?
Should Cost is a powerful fact-based negotiation tool. When used by the right experts in the industry, it provides information that can potentially save millions of dollars. Through our experience working with clients, we have seen that the initial quote provided by the supplier is substantially higher (first bar in the chart). Our experts provide detailed “Should Cost” analysis to our clients that help them realize potential savings opportunity (marked as Leverage of ¥ 500 per component). With this leverage on their side, our client often go into the meeting with supplier with holistic information and can save part of the leverage through fact-based negotiations(Savings of ¥350 shown here). The final quote arrived through such information based discussion is always mutually rewarding for the client as well as their suppliers.
OUR PROCESS
Goken supports clients at every step of the Should Cost process” Reach out to learn more about our expertise in Should Cost.
01
Receive Sourcing Request From Buyer
02
Input – 3D Model and Drawing
03
Route Manufacturing Process
04
Prepare Should Cost Model & Report
05
Negotiate With Supplier Based On Gap Analysis
06
Provide Approval For Sourcing
Cost Engineering
Our core competence in cost engineering lies in Should Costing. "Should Cost" is the optimum cost a product "should" incur to a company considering the best available manufacturing & regional processes. It identifies all significant cost drivers and provides "Cost Insight" for essential decisions during sourcing and manufacturing. These insights comprise of material cost, process cost, overheads, and profit.
Why do companies need Should Cost Optimization?
Assessing true cost of a product requires detailed due diligence of material cost, manufacturing process, and logistics or delivery cost. This information along with the willingness of the market to pay on top as profit defines the true cost of the product.
Serve as a tool for supplier negotiation
Measure cost savings potential
Help in Make vs Buy decisions
Improve in-house productivity
How does should cost help in Supplier Negotiation?
Should Cost is a powerful fact-based negotiation tool. When used by the right experts in the industry, it provides information that can potentially save millions of dollars. Through our experience working with clients, we have seen that the initial quote provided by the supplier is substantially higher (first bar in the chart). Our experts provide detailed “Should Cost” analysis to our clients that help them realize potential savings opportunity (marked as Leverage of ¥ 500 per component). With this leverage on their side, our client often go into the meeting with supplier with holistic information and can save part of the leverage through fact-based negotiations(Savings of ¥350 shown here). The final quote arrived through such information based discussion is always mutually rewarding for the client as well as their suppliers.
OUR PROCESS
Goken supports clients at every step of the Should Cost process” Reach out to learn more about our expertise in Should Cost.
01
Receive Sourcing Request From Buyer
02
Input – 3D Model and Drawing
03
Route Manufacturing Process
04
Prepare Should Cost Model & Report
05
Negotiate With Supplier Based On Gap Analysis
06
Provide Approval For Sourcing
SOLUTIONS & SERVICES
Goken is an engineering and staffing solutions provider fuelled by exceptional talent who partners with companies to solve problems, accelerate development cycles and build better products.