Rough cost estimates (RCE) have often a bad reputation. Too inaccurate. Not proven. No basis for decisions. It is true that rough cost estimates have obviously many limitations, but they can help you a lot to be effective and productive.Continue reading
Introduction to Product Cost Management
A company’s health and longevity are linked to how well it can sustain and grow its profits over time. From a simplified perspective, the company can achieve this longevity by (1) increasing its revenue, and/or (2) improving its profit margin. This six-part-series focuses on the later: improving profit margins via successful product cost management during an R&D project. The series includes the following sections:
- Set the Tone Early. Check Back with the Market Often.
- Create Transparency
- Teach & Empower
- Align Key Cost Decisions with Program Schedule
- Execute. And Document the Decision Logic.
The sections flow in chronological order, although it is important to know that many of these steps are only effective when they are sustained in parallel throughout the entire project timeline. This will become more clear as we progress through the sections together.Continue reading
We’re now working on procurement-engineering.com more than one year. Looking back and reviewing everything shows that we really have put together a nice overview of the most important things in Procurement Engineering. You will not find a better crisp overview. See and find out …
Cost and Value Engineering
Procurement Engineeing is well connected with Cost and Value Engineering. Many Posts deal with the interface between CVE and PE:
Cost Engineer vs. Procurement Engineer LinkContinue reading
If someone is asked when certain organizations shall be involved in a new project, normally the standard answer is “as early as possible”? But why? Parts are procured once they are designed and not earlier. So why should there be an additional interface in the R&D organization, which makes the whole development process more complex, time consuming, and in certain cases more difficult for the designer ;-)?Continue reading