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Product Cost Optimization

Involvement of purchasing in the definition of product specifications

In the procurement and construction of a product, the specifications are often defined as a general condition as an essential cost driver and are not questioned. This massively restricts purchasing freedoms and does not allow alternative constructive solutions. As a consequence, these products have great potentials that are not being exploited. The goal of a cost-optimal product procurement or a cost-optimal product design therefore inevitably means to question the basics of the specification.

The fact that this often does not take place is due, on the one hand, to the large number of parties involved and aspects to be taken into account when drawing up the specification. On the other hand, the timeliness of the specification must be assessed from a technical point of view and in terms of cost effects in the face of constantly changing market conditions.

Typical PCO results

08 Typische PKO Ergebnisse EN - Product Cost Optimization

Project outcomes

  • Reduction of manufacturing costs and optimization of production (between 10% and 40%)
  • Questioning the existing solutions
  • Transparent costs breakdown (core costs)
  • Exploitation of all saving levers: Specification, Design, Manufacturing and Suppliers
  • Benchmark technology, processes, and costs against the market