Solution

Predictive Cost Model

Build deep cost insights across value chain through predictive, actionable cost analytics.

Key Insights

Visibility to cost drivers across entire value chain.
Decision support for potential backward integration, collaboration with second- and third-tier suppliers.
Monitor value throughout the entire product or service lifecycle.
Inputs from pertinent economic factors and indices.

Overview

Predictive Cost Model (PCM) develops robust “should cost’’ models that provide predictive, actionable analytics to identify cost reduction opportunities of 20–50%. It uses advanced Excel tools for category sourcing project delivery, where the model is customized based on factors such as volumes or manufacturing processes. PCM also provides insights that cross-functional teams can use to address each cost driver and identify trade-offs to create sustainable cost advantage.

Features

  • Proven rigorous approach to accelerate the development of robust cost models by leveraging supply market insights and client inputs
  • Greenfield approach to discover all value drivers
  • Insights into production costs incurred by suppliers across their value chain, for better negotiations
  • Provide information on the relationship between product specifications, volumes and conversion costs, and drive effective design changes
  • Develop mutually beneficial agreements that include optimal cost structures to form a partnership model
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