What can we do
Target Price Cost Estimating Service, a division of CostMasters, provides cost engineering services for mid-to-large sized manufacturing organizations worldwide. The service is an ideal solution for companies that do not have either the time or resources to do detailed product cost analysis in-house. we put empathy for your business , fact based approach , data based analysis & measurable results. Based on numerous consulting projects in the field of product cost analysis and optimization, we have developed comprehensive and competent expertise within the following subject areas.
Cost is an important factor for success of almost every business. Objective of TPA is to help you negotiate cost first time right, as you have the maximum negotiating leverage at the start of the contract. Our aim is to determine the most cost-effective and efficient materials and manufacturing processes for a particular part or product.
TPA can also help you in verification of the adequacy of purchase prices by bottom-up analysis of the underlying manufacturing processes and cost structures. Systematic identification, validation, implementation of purchasing potentials & enhancing profits.
Process/ Approach TPA
A very highly Professional and methodical approach is adopted to conclude TPA for your benefit.
Machine Costs
For the calculation the machine hourly rate is allocated by means of the period of use(cycle time) to unit costs.
Should Cost Analysis: A Tool par excellence in your Cost Management Kit
Strategic sourcing has been an integral part of most supply chain models for decades. The essence of strategic sourcing is to create an environment where multiple vendors competing for a company’s spend drive down prices and drive up performance and services. But what about products and services where there are only a few providers, or where the product itself is so unique or highly specified that only a few suppliers can make it? Perhaps the item in question is custom built, complex to manufacture and purchased in low volumes making it difficult to get comparable competing bids. In many businesses, these categories of spend can be a significant portion of the total. What do these companies do?
One solution to this problem is a technique known as should cost analysis, which allows a company to simulate the manufacturing process and cost structure of its suppliers providing valuable information for supplier price negotiation. In order to understand how and where to apply should cost, it is important to understand the limitations of traditional strategic sourcing.
Where cost comparisons don’t work:
The reliance on supplier competition to drive down prices works best when the subject products are very comparable. This is one reason why strategic sourcing is frequently applied to indirect spend. Even when the pricing is complex, for example telecom, shipping or information technology, the actual product or service is fairly comparable so it is relatively straightforward to compare opposing proposals.
Strategic sourcing gets more complicated when applying it to direct materials. Of course many direct spend items are relatively common and have many alternate suppliers so it is possible to do direct price comparisons. But what about an item designed and engineered with characteristics specific to your product. Examples of these items are everywhere from your car to the appliances in your home to the airplane that you fly on. Many of these items are also consumed in relatively low volumes, further complicating attempts to reduce purchased price. This is where should cost analysis enters the picture and provides a valuable additional tool to manage category spend.
Application to sourcing:
Should cost models provide insight and direction that can be invaluable when negotiating prices with a supplier. They help purchasing professionals understand what is driving an item’s cost and allows them to explore a variety of scenarios such as how changes in labor and overhead rates or improvements in process efficiency might impact an item’s price. By comparing the model’s output to a quoted price, purchasing can infer profit margins, production efficiency, overhead costs, and other key negotiating elements. It should be in the procurement toolkit of every manufacturer that buys highly engineered and costly items from a range of suppliers
Source:- Scrap Price in India
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