Experience has taught us that buyers who understand should-be costs achieve prices that are 8-18% lower than buyers who do not. One practice employed by buyers is the use of cost breakdowns. Buyers who achieve the best results from breakdowns employ the following: Utilize commodity specific cost breakdowns - Trying to use one format that incorporates the needs of many commodities often results in a breakdown that is too complicated and unlikely to provide useful data from suppliers. … [Read more...]

Customers who have engaged us to develop should-be cost models usually do so for one of two reasons: To validate quotes being provided by suppliers. To estimate pricing without sending out Request for Quotations to their suppliers. Good should-be cost models fulfill both objectives enabling buyers to buy at prices 5-11% lower than buyers who do not have cost models. Should-be cost models can provide additional benefits: Knowledge – Improved knowledge within the buying … [Read more...]

As the economy starts to slow purchasing leaders are telling us that they are under increasing pressure to increase cost savings efforts and results.  A commodity-by-commodity review of company spend can often turn up untapped, easily implementable savings.  To start, take the time to write down the questions you should be asking about each commodity in your spend that will help you identify which commodities have a savings potential.  For example: Here are some of the questions we ask … [Read more...]

There’s a simple and straightforward alternative for buyers when they have to answer the “how much will it cost” question. Rather than RFQ’ing the supply base, they can use should-be cost models to estimate what a new part, design change, or material price change will cost. With the right data, purchased material costs can be estimated in minutes rather than days. Some companies use complex clean sheet cost estimating software. Other companies have sophisticated cost models developed from … [Read more...]

Gaining commodity specific knowledge on how to move to optimal costs helps buyers achieve cost objectives and accelerates their careers. We have developed a series of commodity specific video podcasts that provide the methods we have been using to help clients understand should-be costs and achieve exceptional levels of savings. To help attendees implement the methods presented, podcast attendees will receive commodity specific tools like; APD’s step by step quote analysis guide Our … [Read more...]

Learn how you can leverage our 15 years of shop floor costing data to move to optimal pricing. OCV is based upon AI and Machine Learning and provides companies with detailed analysis of supplier quotes against best-in-class Optimal Cost Models. High performing purchasing organizations use Optimal Cost Validation to: Engage in supplier negotiations based upon facts that are validated within the industry Ensure buyers are buying at the right price Simulate multiple scenarios for … [Read more...]

Linear modeling provides a fast and easy way for buyers to do great things like identify savings opportunities, estimate pricing and estimate process metrics like cycle time and press size. In this educational podcast series we will show how buyers can develop models and how to use them to move to optimal costs. Attendees will receive a step-by-step how to develop linear models guide.   Click Below Video Podcasts: Stampings--Live Podcast--August 6th at … [Read more...]

Celebrating 15 Years Passion for understanding costs and working collaboratively with suppliers to reduce it led me to establish APD some 15 years ago (incorporated on June 30, 2019). I did not grow up with my mother whispering in my ear “You want to be in purchasing”.  Instead, it was Charlie Ross, a Purchasing Manager at Ford, who recruited me with my freshly minted MBA and manufacturing operations experience into purchasing back in 1984. At the time, GM, Ford and Chrysler had 80% or so … [Read more...]

Are you Living in a Flat Data World?  Most buyers who ask and receive detailed cost breakdowns use them to support the sourcing decision that is facing them and then instead of creating a data pool they put the breakdowns to the side.  They are living in a flat data world.  What is the alternative? Leading companies do not live with flat data.  Instead they employ a systematic approach to identify the right data to collect on commodity specific cost breakdowns.  What is the right data?  It’s … [Read more...]

Advanced Purchasing Dynamics Unveils Optimal Cost Validation Program – Based Upon AI and Machine Learning! Optimal Cost Validation (OCV) enables purchasing organizations to easily understand if they are buying at the right price PLYMOUTH MI -<June 5, 2019>- Advanced Purchasing Dynamics, a leading purchasing consultancy has unveiled a game changing program that will enable purchasing organizations to better understand if they are achieving optimal costs and buying at the right … [Read more...]