5 Ways Cost Models Help Companies Succeed
Cost models provide companies valuable benchmarks to validate supplier pricing. Used effectively, they help drive optimal design, reduce the time required to bring products to market, and help companies succeed. Coupled with advanced analytics they can be used to predict supplier pricing.
Jeoff Burris started Advanced Purchasing Dynamics in 2004 to help companies with collaborative, knowledge-based sourcing through understanding manufacturing costs. APD developed and implemented a variety of cost models to help companies move to collaborative, knowledge-based processes.
APD’s Cost Management Certification Program gives companies the knowledge and tools to answer these questions and achieve Optimal Cost.
Here are 5 ways we have seen cost models helping companies succeed:
- Collaborative cost modeling enables Purchasing, Engineering and Operations to work with fewer suppliers.
- Suppliers can be sourced prior to design, brought into the design process and can help optimize it; this results in shorter design time/lower cost.
- Suppliers, removed from the constant threat of market testing, are more open with intellectual property on process, design and costs.
- Customer and supplier teams can use the models to drive cost and design improvements.
- Cost models and current supplier pricing can be used to develop predictive pricing.
To view a White Paper on building knowledge-based estimation models, Click Here
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