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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.

Open Book Cost Model

Why Open Book Cost Model?

  • The quickest way to achieve significant savings.
  • This process ensures the fastest agreement with suppliers.
  • Our customers rate us very highly in terms of satisfaction.
  • Our “Collaborative Open Book Cost Models” have earned us awards.
Open Book Cost Modeling Vice Presidents Award