Cost to Source
Target + Should Costs

With 80% of costs locked in during design, target and should cost analysis gives you the ability to analyze the true costs of a new product long before it is ever produced. Custom, engineer-to-order, and contract manufacturers use should costing programs to align product development, engineering, manufacturing, and sourcing groups to determine expected component and product costs before engaging any vendors in an RFQ process.

ImpactECS combines cost data including raw material costs, labor rates, overhead costs, and profit margin requirements to model product costs and identify cost drivers in a meaningful way. You can improve vendor negotiations, identify cost reduction opportunities, drive pricing decisions, and evaluate profits by unique product. ImpactECS provides the platform to perform fact-based cost comparisons to find the right materials, processes, and strategic partners.

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  • Determine target costs for new products: Calculate detailed material, labor, conversion, and overhead costs to determine baseline cost answers that drive material, component, production, and supplier decisions.
  • Improve supplier negotiations: Offer transparent cost details to improve your procurement team’s bargaining position with suppliers.
  • Identify cost reduction priorities: Evaluate existing product should costs to identify outliers and uncover potential cost-saving opportunities across materials, components, or suppliers.
  • Simulate cost performance: Adjust volumes, product mix, resource availability, capacities, utilizations, or other inputs to see the impact on both production and procurement costs to overall product profitability.

VIDEO: Product Costing and Scenario Analysis with ImpactECS

Knowing the unique cost of each product you make doesn’t have to become a spreadsheet exercise. Learn the questions to consider when evaluating your product costing program, and see the benefits of an integrated product costing platform that connects data and systems with your unique business rules. Then unlock the power of scenario analysis in costing to improve your planning capabilities.


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