SMART Management Executive System Concept

Cost Engineering - Common Challenges

•Difficulty in meeting NPI target costs & annual cost reduction goals

•Difficulty in identifying candidates for cost reduction

•Time consuming costing analysis ... limited capacity during NPI to cost "enough" parts before going to market

•Inconsistent cost estimations - varies by people, tools, regions, etc.

•Limited or varying knowledge of manufacturing processes, feasibilities and cost issues

Sourcing - Common Challenges

•Difficulty in meeting purchasing spend reduction goals

•Difficulty in identifying candidates for cost reduction

•Difficulty in ability to generate detailed cost breakdown to aid in negotiation with suppliers

•Time consuming costing analysis & inconsistency in cost estimation - varies by people, tools, regions etc.

•Limited Sourcing staff’s knowledge about manufacturing processes, feasibility and cost issues

Cost Engineering - sMeS C&P Solution

•With sMeS, Cost Engineers can generate “should costs" rapidly and consistently without having to rely on Manufacturing or Design

• sMeS provides an enterprise platform for Product Cost Management whereby Cost Engineers, Design Engineers, and Sourcing can collaborate on cost estimation and cost reduction

•This helps:

- reduce Costs of Goods Sold (COGS)

- Improve margin

- improve costing efficiency so more parts get costed

- reduce NPI duration and help bring products to market faster

- enable consistent estimates and processes for evaluating cost

Sourcing – sMeS C&P Solution

•With sMeS, Sourcing professionals can make cost conscious sourcing decisions & engage in fact based price negotiations with Suppliers

•This helps:

- reduce Costs of Goods Sold (COGS)

- Improve margin

- improve operational efficiency of sourcing staff and cost engineers

- enable consistent process to evaluate cost

Supported Processes and Cost Models

Processes

•Sheet metal fabrication

•Bar and tube fabrication

•Casting - Sand, die casting, etc.

•Machining

- turning, milling, multi-axis, Gear making, etc.

•Surface and Heat treatments

•Logistics and packaging

•Plastic molding

•Welded or mechanical assemblies

•Forging

•Powder Metal

•Other user guided ex: PCBA, fabrics, etc.

•Inspection

Production Volumes

•High - Consumer Goods, Automotive, High Tech, etc.

•Medium - Medical, Agricultural and Construction Equipment, Industrial Equipment, etc.

•Low - Oil and Gas, Aerospace and Defense, etc.

Parts Size

•Large - Oil and Gas, Aerospace and Defense, Agricultural and Construction Equipment, etc.

•Medium - Automotive, Industrial Machinery, Consumer Goods, etc.

•Small - High Tech, Medical, etc.

Sample sMeS C&P Solution Use Cases

•Re-negotiating supplier contracts

•Make v/s buy (outsourcing) decisions

•Evaluating low cost country sourcing

•Evaluating moving back to sourcing from US, Europe - Re-shoring

•Evaluate impact of changing production volume at a factory

•Analytics - Spend consolidation, Purchase Price Variance, standard v/s actual costs, trends, dashboards, scorecards

•Evaluate alternate designs

•Evaluate alternate materials

•Evaluate alternate manufacturing processes, cycle times, tooling etc.

•Evaluate alternate manufacturing locations

•Product BOM cost rollup v/s target cost

•BOM comparisons, select best cost BOM configuration

•Analytics - Standard costs v/s target costs, NPI duration, trends, dashboards, scorecards