◎
Improve Product Cost Estimation
Establish target costs for products and components during the design process to guide more informed design and sourcing decisions.
Control Costs Earlier with Product Cost Management
Bring product, cost, and sourcing information together earlier in development to build more informed cost estimates, understand cost drivers, and identify savings opportunities before sourcing decisions are locked in.
- Product cost estimation
- Should-cost analysis
- Design-to-Cost
- Cost reduction
Find the cost gap before sourcingIllustrative example
Compare the target, calculated should-cost, and supplier quote while there is still time to act.
Target costWhat you planned
$84.20
Should-costWhat it should cost
$86.10
Supplier quoteWhat was quoted
$92.40
Supplier quote is above should-costCost opportunity identified before sourcing
+$6.30per unitNegotiate the quote
Review the design
Use the cost gap to take action before sourcing is locked in.
Connect engineering and procurement around a unified view of product cost.
Earlierproduct cost estimation
Closerdesign and sourcing collaboration
Strongerproduct cost control
Product Cost Control Starts Before Sourcing
When cost management begins at sourcing, many of the decisions that determine your product costs are already in place. Component specifications, material choices, supplier options, manufacturing requirements, and design tradeoffs have already narrowed your opportunities to influence margins. Without earlier visibility into these cost drivers, your design and procurement teams are left trying to reduce costs after many of their best opportunities have already passed.
Managing product costs earlier starts with four capabilities that give design and procurement teams better visibility before key sourcing decisions are made:
≡
Build Should-Cost Models
Create fact-based cost models using detailed cost components and sourcing information to better understand what products and components should cost.
↔
Understand Manufacturing Cost Drivers
Analyze the factors that contribute to production costs and understand which have the greatest impact on product cost.
↘
Identify Cost-Reduction Opportunities
Use product, supplier, and sourcing cost insights to identify opportunities for stronger negotiations, design improvements, and continuous cost reduction.
Look Beyond the Numbers to Understand Product Cost
Product cost is shaped by more than a single estimate or supplier price. Across the BOM, materials, manufacturing methods, tooling, labor, overhead, and supplier pricing all contribute to a clearer view of what a product or component should cost. Connecting these inputs gives engineering and procurement a stronger basis for comparing target costs, should costs, and supplier quotations before key design decisions are made.
- Analyze material, tooling, labor, overhead, and manufacturing costs
- Compare target costs, should costs, and supplier quotations
- Reveal BOM-level product cost drivers across the development lifecycle
- Use connected insights to identify product cost-reduction opportunities
Make Informed Product Cost Decisions with Caidentia
Caidentia connects product structures, cost information, supplier quotations, and sourcing workflows so engineering and procurement can evaluate cost implications as designs evolve, before key sourcing decisions have already been made.
1
Estimate the Target Cost
Establish target costs earlier in development and evaluate product and component costs against targets as designs evolve.
2
Analyze the Should-Cost
Determine what products and components should cost to identify gaps between target costs, should costs, and supplier pricing.
3
Reduce Product Costs
Apply cost insights across design, sourcing, and supplier decisions to improve product margins.
Customer results
Proven Product Cost Results in Automotive
A global automotive manufacturer used Caidentia to standardize complex supplier quotation analysis and apply AI-driven should-cost analysis.
1 week → several hours
Quote analysis and validation
5 –10%
Reduction in purchasing costs for interior components
By organizing historical quotation data and applying AI-powered should-cost analysis, the manufacturer strengthened supplier negotiations while improving consistency across procurement teams.
Bring Us Your Product Cost Challenge
Tell us where your team needs greater visibility or control over product costs. A Caidentia expert can discuss your current approach and look at ways to improve product cost decisions during development.
- See how design-to-source workflows strengthen your design-to-cost approach
- Identify where earlier cost visibility could improve your design and sourcing decisions
- Learn how other manufacturers have addressed similar product cost challenges
Talk to a Caidentia Expert
Complete the short form to discuss your product cost management needs.
See What Else Caidentia Can Do
Discover how Caidentia orchestrates design to source to pay by connecting engineering, procurement, and supply chain.
Explore Caidentia