Identified potential of 40% compared to the offer
The Situation/challenge and goal
- Cost analysis of Retrofitting a regional vehicle
- Determination of Cost Potential
- Estimation of manufacturing costs for installation / conversion (Retrofitting) for a standard and a minimal solution variant
- Establishing of development costs
Approach
- Cost assessment of the existing vehicle
- Definition of the changes (Delta-approach)
- Cost assessment of the adaptions (changes)
- Establishing of development costs
- Estimation and Evaluation of a minimum changes (Retrofit) version
- Analysis of the overhead cost structure of the manufacturing company
Results
Clear definition of a target price and a timeframe (Schedule) for the implementation of the changes
Transparent, defendable basis for tender negotiation
Identification of cost drivers
Assessment of alternative configurations with definition of the conversion effort
Identification of a 40% savings potential versus initial quotation (offer)
Evidence! conducting a 4 cost-LCC analysis: breakeven <10 years
The Situation/challenge and goal
- Wind-Park of this size unique
- Besides the Wind-Generators the Transformation Platform and as well, the Land ground support, should be considered
- Lifecycle cost previously
- Maintenance Concept not considered
Approach
- Cost estimate of the proposed Plant (including Transformation Platform and Land Ground support)
- Determination and boundaries of the LCC inputs (Maintenance, Spares and repair scenarios)
- Simulation of Life cycle cost based on premises
- Variety of premises
- Determine the best LCC concept
Results
Identification of costly elements during Lifetime usage
It is therefore possible to store the relevant spare parts needed
Liquidity planning for capital expenditures based on annual rates
Determination of the TCO (Total cost of ownership) with clear identification of the break-even points
Early project estimation with 4cost models having a maximum deviation of 5% achieved
The Situation/challenge and goal
- Development of a total new airplane typus
- First ROM are requested
- Defining of a should price to validate the ROM´s
Approach
- Setup of a rough Work break down structure
- Assumptions of possible realisation scenarios are setup by experts
- Base premisses: Quantity, Load, Date of maiden flight
- Cost calculation of the components / assemblies
- Validating the integration and test efforts
Results
10 years after the parametric cost estimation the base premisses have been adjusted
Delta to the purchase costs in range of 5 %
Long-standing supplier reduces prices by 10% after parametric analysis with the 4cost-suite
The Situation/challenge and goal
- The purchase department requested ROM’s from suppliers
- The management needs assurance about the offers “value for money”
- The supplier has over 20 years in this area of business and has supplied multiple systems to the company
- The 4cost GmbH was requested analyse the costing and supporting the negotiations
Approach
- Using the parametric approach based on statement of work
- Creating of a work break down structure (WBS) using the 4cost-aces model
- Interviewing the technicians and the suppliers personnel
- Negotiation support:
- Discussion of outliers (cost and technical requirement’s)
- Validate new and repeating design discussions
- Validate the requested engineering hours
- Plausibility checks based on experience of the 4cost Team
Results
4cost GmbH supporting the negotiations resulted in a contractual saving of 10%
Serial costs only 3% different to the concept estimation with 4cost parametric
The Situation/challenge and goal
- A new generation of injectors is to be developed
- The decision makers demand a detailed calculation
- A bottom-up calculation is not possible at this early stage due to lack of detailed information
Approach
- The cost calculation is only possible using the parametric approach
- In a cost workshop with all participants (developer, designer, project manager, purchaser) the available information is collected
- The parametric cost model 4cost-aces is used
Results
The early cost estimate was compared with the actual cost estimate in the product development, pre-series and series production phases
The real cost variance is 3%
Earliest cost estimate with 4cost in design workshop meets reality by 4% (Series)
The Situation/challenge and goal
- New product line is planned
- First ideas and concepts are borne
- Open questions:
- What will be the production costs in 3 years after launching the project?
- When will we achieve the break even?
Approach
- Kick-off workshop
- Defining a rough work breakdown structure (BOM)
- Cost calculation of the components / assemblies
- Validating the integration and test efforts
- Simulating different scenarios – What-if
Results
Target cost have been achived (Validated 2 years later with bottom-up calculation / SAP production calculation)
Cost delta of 4% between first (parametric) estimate and bottom-up / SAP calculation
4cost identifies cost potential of 30%, supports negotiation and realizes 25%
The Situation/challenge and goal
- The purchase department requested ROM’s from suppliers
- The management needs assurance about the offers “value for money”
- The companies internal costing ideas are based on expert estimations with no transparency, just one lamp sum!
Approach
- Using the parametric approach based on technical product descriptions
- Creating of a work break down structure (WBS) using the 4cost-aces model
- Interviewing the technicians and or Managers
- Validating each WBS-box (electronic, mechanic incl. development and software)
- Validating the integration and test efforts
Results
The “should costing” workshop indicates a delta of 30% versus early ROM´s
With 4cost supporting the negotiation the contract was signed with a total saving of 25%!
4cost identifies cost reduction potentials of 29% through standardization
The Situation/challenge and goal
- Define investment costs
- Calculate the break-even potential versus a semi-automatic solution
- Determine different variants and dimensions
- Determine the reduction potential (cost) of a standardized process
- Determine the non-recurring cost (specifically for development and programming)
Approach
- Technical analysis of existing specifications
- Cost assessment of the existing rough concept
- Recording of the current situation
- Conducting of cost workshops with simultaneous cost evaluation of alternative solutions
- Preparation of the decision document
Results
The Project has will have no break-even
Using standardization processes:
A Cost reduction potential of 29% (material, production) may be achievable
A positive Business case can be represented from a number of 7 plants on
Alternative Lösungskonzepte mit Bewertung des Umsetzungsaufwandes
Cost potential of 15% in engineering and 19% after sourcing strategy analysis through 4cost
The Situation/challenge and goal
- Mark „one“ exists
- Sales volume per year and countries specified by the sales department
- Rough idea about achievable sales price
Approach
- Calculation of cost breakdown on an existing system
- Define changes (Delta approach)
- Costing of the adaptions
- Investigating various sourcing strategies
- Assessment of different assembly structures with regards to production / logistics / pre- and final assembly for different countries
- Consideration of a 10 years project duration including inflation / cost increase
Results
Clear determination of a reasonable target price
Cost potentials from engineering-works of around 15% identified
Cost potential from a sourcing strategy of over 19% identified
Implementation of a homogeneous costing environment implemented in 10 weeks
The Situation/challenge and goal
- Heterogeneous calculation landscape
- No uniform calculation scheme and methodology
- Different Excel-spreadsheet solutions
- Data and know-how are not centrally accessible
- Low transparency
Approach
- Analysis of present data and creation of a requirement concept
- Product requirement –and functional specification document and a SW-supported calculation
- SW alterations & testing
- Implementation
- pilot phase
- training
- rollout
Results
standardized calculation method & methodology
Transparent, comprehensible and defendable calculations
Central data and file management with authorization concept
pooled, bundled Know How
Uniform and consistent reporting
Negotiation success of 60.000,00 € after 4cost-Online Costing-Analysis (invest 147,00 €)
The Situation/challenge and goal
- Purchasing needs information in order to obtain striking arguments for savings in negotiations with the supplier in 3 days
- No internal experts
- Obtaining comparison offers not possible in time available
Approach
- Known information posted on the web portal for online cost estimation (www.onlinecosting.de)
- The quick estimate for 147,00 € online ordered
- After 24 hours, the results as a report incl. Detail information received
- Negotiated with the supplier based on this information
Results
At the negotiation, a saving of more than € 60,000.00 was achieved for the first annual quantity order
Achieved ROI of over 40,000%
Negotiation success of 3 x 20% price reduction according to overhead cost analysis with 4cost-suite
The Situation/challenge and goal
- Purchasing wants to verify the price of a supplier
- In addition to the parametric manufacturing cost analysis, an overhead cost analysis should be performed
- The purchase wants to hold two levers (arguments) of the “cost optimization” in the hand
Approach
- Manufacturing costs parametrically evaluated
- Supplier faced with his details and with the parametric overhead cost analysis of 4cost
- Identified dramatic potential
Results
3-year contract signed with an annual saving of 20%
Time for parametric overhead cost analysis <1 hour