Success at PCM requires a coordinated system of cultural change, process definition, roles and responsibilities, and a continuous focus on their implementation and use.
CHICAGO, Illinois and ANN ARBOR, Michigan, 18 November 2013 – Hiller Associates, the leading strategic consulting firm in the area of product cost and CIMdata, Inc., the leading global PLM strategic management consulting and research firm announce the release of a new research report on Product Cost Management in manufacturing.
Product cost is one of the top attributes that must be delivered by product development. However, very few companies are able to consistently meet their product profit targets at launch. With 70-90% of every revenue dollar in most manufacturing companies being absorbed by product cost, it’s easy to see why the cost of a product is so critical to the bottom line. Over the years, companies have turned to a variety of Product Cost Management techniques to control this largest of expenses on the income statement, including:
- Purchasing negotiation, make vs. buy analysis
- Spend analytics
- Design-to-Cost (DTC)
- Feature Based Costing (FBC)
- Design for Manufacturing (DFM), Design for Assembly (DFA)
- Competitive teardown and benchmarking
- Target costing and Activity Based Costing (ABC)
- Value Analysis / Value Engineering (VA/VE)
- Parts re-use
Hiller Associates and CIMdata surveyed respondents from many industries and drew upon decades of their own experience in the field to provide a comprehensive report that discusses the state of product cost today and how well companies are doing at meeting cost targets. This report defines each of the Product Cost Management techniques and puts them in perspective. It discusses the priority of cost as a product attribute versus time-to-market, quality, performance, and other product attributes. It also discusses how extensively cost targets are set in industry today, what percent of products meet cost targets, what product cost management techniques companies are using, and what software tools can help.
Hiller Associates and CIMdata analyze what industry experts believe is holding companies back in meeting product profit targets in terms of culture, process, tools, and people. And finally, the report examines how product cost management relates to the belief in that “80% of the cost of a product is determined in the first 20% of the lifecycle?”
Cost Commitment and the Product Development Lifecycle
The Hiller Associates / CIMdata report, Product Cost Management in Discrete Manufacturing, is available for purchase by clicking Here.
