According to manufacturing journalist, Thomas R. Cutler, in a recent issue of Tooling & Production Magazine, "In the past, engineered solutions required lengthy bid generation process before the fabricator or tooling manufacturer could deliver a strong response to a proposal request. Interaction between engineering and manufacturing was hindered based on the lack of system tools and lack of integration between CAD and ERP systems; this all impacted speed to customer response and generated internal disconnects between engineering and manufacturing. When project-based tooling manufacturers are not configuring from a preset mix of common components, the need for a collaborative environment becomes extremely important to design to the customers specifications."
The complete article may be viewed at http://trcutlerinc.com/tp_122006.pdf.
Cutler added, "Given the regulatory environment in which manufacturers currently operate, these engineering cost-savings facilitate compliance with company, legislative, industry, quality, and design requirements."
According to Frank Azzolino, President & CEO of aPriori Technologies, "With ETO the key is to get it right the first time since there is often no long production cycle in which to redesign and get the product and cost corrected over time. A critical element of ETO is to discern very early on what the cost will be; this drives margin. In the current ETO environment there are two choices - bid aggressively to win the deal and accept the risk of very low (or negative) margins, or bid conservatively to account for the risk of not fully understanding the impact of the customers choices on cost and risk - not getting the deal."
Cost of Goods Sold (COGS) has become an increasingly important metric as the largest expense item on the income statement; typically 70% to 90% of revenue. Manufacturers are forced to focus on product cost and profit margins with renewed vigor. Cost targets, an important component of design-to-cost strategies, are now being defined early and with greater granularity, even down to the individual component level. Meeting these detailed cost targets at product launch (avoiding expensive, lengthy post-production cost reduction phases) is a new challenge and manufacturers are struggling to find effective systems or tools to assist in this effort. A Cost Management (CM) platform, such as that developed by aPriori, can help manufacturers address the challenges in New Product Introduction (NPI) programs.
Based in Concord, MA, aPriori is the technology leader providing innovative cost management solutions to the discrete manufacturing industry. aPriori's Cost Management Software Platform enables manufacturers to better understand product cost decisions early and throughout the product lifecycle. aPriori's Cost Management Platform empowers manufacturers to lower cost-of-goods sold (COGS), provides real-time visibility to "cost-critical" decision information, and builds critical cost knowledge to go on the business "offensive." aPriori's patent-protected cost management platform allows companies to assess, control, and reduce cost of goods sold by whole percentages. The aPriori Platform enables "Cost Knowledge Before it Matters."
