Oct 292012

Last week Hiller Associates published an article on Should-cost in one of the leading online magazines for manufacturing companies, IndustryWeek.com.   Below is a synopsis  of the article.  However, you may want to just read the article here:

Your Should-cost Number is Wrong, But It Doesn’t Matter

Should cost is not perfect, but it does not matter, because its purpose is to be a leverage tool to improve negotiated cost, regardless of the should-cost number’s absolute accuracy.

  • What is should cost?
  • Methods of should cost?
  • Uses of should cost, specifically to reduce the price of products one buys
  • No one expected Peter Lynch to achieve his absolute return predications for a stock
  • How to use should cost as pricing pressure
Sep 112012
Siemens buys Perfect Costing Solutions (Tsetinis)

Today is a day of solemn remembrance for Americans and many around the world who remember the 9-11 attack on the the United States of America.  However, there is at least one person who likely quite happy today for a very different reason: Andreas Tsetinis.    Andreas is the Founder and CEO of Perfect Costing Read More!

Sep 052012
This is no time to think about profit! We're doing badly enough already.

Yes, you read the title correctly.  It may sound like an oxymoron, but some form of this statement is uttered every day in the world of Product Cost Management (PCM).  Usually, a company, will say, “I don’t have time for profit.” right before it notifies the PCM software vendor that it cannot buy the vendor’s Read More!

Jul 232012
The 6 Reasons Why People and Organizations Withhold Data (Habeas Corpus Data, Part 2)

Last week we began talking about a common problem in many projects, including Product Cost Management: the withholding of needed data for analysis and modeling.  We also talked about the many reasons, some legitimate and some not, why people refuse to share data. Those reasons are summarized in the graph below. Then I introduced one Read More!

Jul 192012
Habeas Corpus Data (Part 1)

Data. At the end of the day, the data and assumptions that we use in Product Cost Management, specifically in cost models, is as (or more) important than the equations and the approach to modeling itself.  The classic example in cost modeling is raw material rates ($/kg for steel, plastic, etc.). A close second and Read More!

Jul 092012
The Voice of Should-Cost (Voices Series, Part 3)

It’s been a couple of weeks, since we discussed the Voices series, so if this post is interesting to you, you may want to go back and read the first two: Do you hear the voices? (Voices Series, Part 1) The Voices of Discord in Product Cost Management (Voices Series, Part 2) In these first Read More!

Jun 252012
Don't Pave the Cowpath; Plan the Autobahn (Part 3 of Pete Schmitz at Harley-Davidson)

Today we have the third in our series of insights from the article “Putting it All Together at Harley-Davidson.” At the end of the article, Pete Schmitz strikes a chord in my heart when talking about supplier selection:     [Schmitz] Don’t pave a cowpath! We believe in never automating a bad process – first, Read More!

Jun 182012
What are you trying to boil? (Part 2 of Pete Schmitz at Harley-Davidson)

To continue my thoughts from last week’s blog regarding the article  “Putting it All Together at Harley-Davidson“, I’ve put together some additional insights below. Keep Your Product Cost Management Promises and Don’t Force Others into Promises They Can’t Keep I am reminded of a story about, Saint Augustine of Hippo, a brilliant theologian, who meets Read More!

Jun 112012
Where's Finance and Accounting in Product Cost Management? (Part 1 of Pete Schmitz at Harley-Davidson)

I just read the article “Putting it All Together at Harley-Davidson” in the July 2012 [July??] Blue Heron Journal.   The article is a profile on Pete Schmitz, a Honda veteran in Product Cost Management, who now works at Harley-Davidson.    According to the article,: “[Schmitz] combines procurement, design, manufacturing and cost expertise in a Read More!

May 292012
What's in a Product Cost Part 1 -- Grand Theft Auto [Capital]

One thing that is interesting about Product Cost Management is that people have different thoughts as to what is included in the product cost.  Is the product cost the raw material, labor, and direct  labor?  What about the capital tooling?  What about logistics and shipping?  Oh, and what about warranty cost or end of life Read More!

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