Cost Analysis and Containment
Today, more than ever, cost control is essential for survival. Gone are the days when price increases were a solution for low or eroding profit margins. In today’s competitive environment, customers will not accept higher prices and, as we know, price reductions within the automotive industry have become the norm.
High performing automotive suppliers, measured in terms of profitability, recognized the need to be low-cost producers, not just low-cost manufacturers. As a result, they embraced cost management techniques to identify, measure and control internal costs, and to evaluate competitive costs. These same techniques are provided by ACG, on a project to project basis. They are:
- Estimate tooling costs based upon the manufacturing process
- Develop piece price cost estimates based upon the component design and material
- Evaluate process and design features that influence the component cost
- Develop a written description of the assembly process
- Develop an assembly process labor cost estimate based on a given volume of production
- Develop the finished product cost for the complete units based on local manufacturing and assembly