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 detailed cost breakdowns from supplier quotes. What can you do if neither of these are in your team’s toolbox?
Three simple approaches are described below. These are a great starting point for a purchasing team to reduce their workload and response time to answer the “how much will it cost” question.
We have some free education podcasts on the subjects: For more information click here
We have commodity specific one-day training sessions for buyers on these subjects: For more information click here