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Collaborative Supply Chains

Types of Cost Models

Our cost models adapt to the relationship with your suppliers.

  1. Strategic Relationships use our collaborative open book cost models.
  2. Less strategic relationships apply our enterprise cost models.

Enterprise Cost Models

  • Based on hypothetical manufacturing factories.
  • Based on Actual equipment and manufacturing processes.
  • Regional Specific.
  • Minimum waste assumed.
  • Above average capacity and asset utilization.
  • SGA and Profit 15%-20%.

Collaborative Enterprise Cost Models

  • Starts with Enterprise Cost Model.
  • Shared with Suppliers.
  • Asks for suppliers feedback.
  • Updates are made together with the supplier.
  • Achieves supplier’s approval and Implementation.

Open Book Cost Model

  • Starts with Enterprise Cost Model.
  • Based on Actual equipment and manufacturing processes.
  • Requirement of a Strategic Supplier Process.
  • Supplier is requested to have a cost model in place.
  • Supplier Visit is schedule to perform a Data Gathering Workshop.
  • Cost Model is Developed that is specific to the supplier.

Collaborative Supply Chains

Regression vs Cost Model

Collaborative Cost Models Outperforms Regression Analysis

Collaborative cost models are a powerful tool for understanding the cost of manufacturing parts and assemblies. They outperform traditional regression analysis methods by providing a more comprehensive and accurate picture of the costs involved.This approach allows for a more detailed understanding of the costs involved and can lead to significant cost savings for manufacturers.

  • This process is the fastest path the most savings!
  • This process is the fastest path to agreement with suppliers!
  • Customers give us very high satisfaction scores!
  • We receive awards for our “Collaborative Open Book Cost Models”
Open Book Cost Modeling Vice Presidents Award