This document discusses the need for product costing solutions and Vedant Resources and Infrastructure Development's should costing services. It notes that product costs account for 70% of revenue and are key to profit but detailed cost breakdowns are unknown in the concept stage. The challenges include engineers being unfamiliar with manufacturing processes and limited cost data during development. Vedant provides should costing, tear down analysis, local sourcing support, and cost estimation to help understand cost drivers, optimize design for cost, and aid in supplier negotiations. Their approaches include bottom-up, parametric, and rough order of magnitude cost modeling at different levels of detail and speed.

1. The right choice for “Should Product costing solutions”……

2. Vedant Resources and Infrastructure Development,
Pune ,India based company, is a bridge between
Overseas companies and Indian market. With support
of Associates companies & strong local network ofof Associates companies & strong local network of
consultants, contractors, we provide Mechanical
engineering services for Process Industry ,Product
design & development, CAD, CAM, CAE and PLM
consulting services in multiple industry domains.

3. Need of Cost estimates with global Costing Standard
Product cost accounts 70% of revenue and key to profit
Detailed breakdown for ‘Target cost’ not known
Cost commitment highest in concept stage
Black boxes are a cost estimate challenge (i.e. single sourcing
proprietary technology or partnerships)

4. Need of Cost estimates with global Costing Standard
Challenges within Organization:
Design Engineers less familiar with manufacturing processes
Limited amount of data and cost knowledge during development phases
Product Cost estimation needs to be a consistent, reliable process in the organization
Prioritize parts according to business and resource constraints
Actual Need of Organization:
Adopt cost avoidance strategy in product development process
Align ‘actual cost’ to ‘cost targets’
Trade off decisions during design stage
Effective supplier negotiations
Understand factors influence the cost – design, market, geography, capabilities and
competency

5. Our Services…
VAVE
Should Costing
Tear Down (Competitive cost analysis)
Local sourcing
Supplier NegotiationSupplier Negotiation
Cost estimation at Design stage

6. “Should Cost”
Should cost – A leveraging tool to reduce total cost without cutting
project scope or capabilities or eroding supplier’s profit
Understand high cost drivers at initial stage of project to set the
target cost for the product
Facilitate design engineering team in product optimization by
providing best manufacturing suggestions
Detailed should cost estimates (with provision to what if analysis)Detailed should cost estimates (with provision to what if analysis)
to supply chain which will act as negotiating tool

7. Deliverables..
Input Output
1. 3D model, Drawing of assembly and child
part BOM
2. Annual Volume, Lot size
3. Manufacturing location
4. Raw material rate
5. Machine hour rate,
6. Labour hour rate
7. Purchase item cost (Bought out item)
1. Detailed part cost
2. Costing Analysis
3. Cost reduction suggestions
7. Purchase item cost (Bought out item)
8. Company specific specification if any
Benefits
1. Cost data support as base to decide purchase cost, sale cost, supplier negotiations
2. Optimize design with respect to cost
3. Build historical cost data for future use
4. Competitive price in market
5. Optimize cost with respect to sourcing
6. Make or Buy decision
7. Support in supplier negotiation meetings

8. Costing solution approaches for specific applications
InputsInputs
Cost
Model
Cost
Model
Bottoms-up costing
• Complete detailing of
the manufacturing
processes required
• Actual data computation
• Material costs
• Indirect costs
• Overhead costs
Detailed Design, All cost
driver data
Detailed Design, All cost
driver data
Parametric costing
• Historical data is
collected and
mathematical
techniques are applied
• A cost driver is a property
of the product (material,
surface finish, etc.)
Key cost drivers Or CAD
data
Key cost drivers Or CAD
data
Rough Order of
Magnitude (ROM)
• Assumption that similar
products cost data
history is available
• Certain adjustments may
be made based on
complexity or other
differences
Key cost drivers Or CADInputsInputs
SpeedSpeed
OutputOutput
Applicatio
n
Applicatio
n
UsersUsers
driver datadriver data
SlowSlow
Should costShould cost
Actual estimates for high
cost parts, Should costing
Actual estimates for high
cost parts, Should costing
Product Cost Group (with
Manufacturing Expertise)
Product Cost Group (with
Manufacturing Expertise)
datadata
QuickQuick
Indicative cost (depends
on parameters)
Indicative cost (depends
on parameters)
Rough estimation
(Design, Details of
assembly)
Rough estimation
(Design, Details of
assembly)
Design Engineers,
Purchase, Supply Chain
Design Engineers,
Purchase, Supply Chain
Key cost drivers Or CAD
data
Quick
Indicative cost (depends
on history)
Rough estimation
(Design, Details of
assembly)
Design Engineers,
Purchase, Supply Chain

9. Why Vedant Resources & Infrastructure
Development
The Right Knowledge and Experience
1. Experience in “Should Costing services” with different domain like Aerospace, Industrial,
and Automotive industries
2. “Should Cost” team of over 5+ engineers
3. Experience in manufacturing techniques and product types such as machining,
fabrication, and sheet metal

10. Vedant Resources and Infrastructure Development
Pune, India
info@engineeringtoindia.com
www.EngineeringToIndia.com
https://in.linkedin.com/in/paragnaukarkar