Should-cost modeling is not a new approach, and yet it is under-leveraged as a cost reduction strategy. Procurement’s typical approach is to simply look at the overall price being paid and squeeze the supplier’s margins.
Understanding the detailed cost breakdown of any product – including materials, machining costs, labor, transportation, overhead, and profit – opens the door to more educated conversations with suppliers and a better quality finished product delivered on time at a reasonable price.
Yushiro Kato is the Co-Founder and CEO of CADDi. As an expert in should-cost analysis, he shared more about its effectiveness as a cost reduction strategy and also for its potential to serve as the catalyst for collaboration with key suppliers.
Watch this industry webinar that will help you:
- Understand the impact should-cost analysis can have on profitability
- Recognize the advantages associated with executing should-cost analysis at scale, across all of your company’s products
- Explore additional opportunities to collaborate and innovate with key suppliers to everyone’s benefit