Due to significant competitive pressure, the automotive industry has grown Cost Engineering (CE) as a core capability to achieve a better cost transparency and gain negotiating power. As a result, large cost-modelling departments, staffed by hundreds of highly skilled engineers and equipped with leading tools and databases are chasing the entire supply base to reduce cost.
The market pressure results in common cost optimization work along the whole supply chain
Competitive pressure to win business is high
Many suppliers are struggling to defend their current prices, resulting in the choice of to either lose future business and market shares or cope with (further) reductions in profit margins. The current transition toward e-mobility also poses significant risk to entire business models.
To face this challenge and secure future competitiveness, suppliers across sectors need to improve CE capabilities.
How we faced this challenge
We supported in ramping-up best-practice CE capabilities by:
- Defining organizational structures, sizes, and capabilities
- Integrating CE in overarching target cost management processes
- Delivering training-on-the job for CE and cross-functional experts
- Piloting the approach across the product portfolio
Phases and major steps to grow cost optimization capabilities toward world-class
Sustainable long-term competitiveness – delivered!
- CE is an accepted expert function for generating cost transparency
- Capabilities cover the full range (i.e. products, tools and investments)
- Cross functional collaboration delivered cost improvements of 15 percent
“Successful programs need more than just cost calculation. A pragmatic, benefits driven and cross-functional approach that does not get lost in theoretic analysis only is key!”
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Working with the most qualified Tsetinis Consultants is key to your success.
Speak with an expert in your industry who can help you move your company toward your specific goals. We implement our expertise in a very specific and targeted way and tailor the choice of methods to your individual requirements. In this way, we can ensure your long-term success.
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Product Profitability Programs
Implementation of Cost Engineering / Cost Management