Dec 13, 2010

aPriori Launches New Product Cost Service Bureau

Concord, MA – aPriori, a provider of product cost management software and service solutions for discrete manufacturers, today announced the launch of a new Product Cost Service Bureau:

* aPriori’s Outlier Analysis service will help sourcing teams quickly identify which current quotes for direct spend items may be significantly overpriced by batch analyzing hundreds or even thousands of parts for should cost and weight-to-cost outliers.

* aPriori’s Should Cost Service Bureau will provide manufacturers with benchmark should costs for new product designs to use in supply chain planning, quote validation, and fact-based price negotiations.

These types of analyses are extremely time consuming when attempted manually or without manufacturing expertise. aPriori’s Professional Service team can complete a project in only a few days or weeks for a large costing project.

These services are available immediately, do not require a software purchase, and involve only a small investment of time from the customer. Both services are available as a one-time engagement or as a regularly occurring subscribed service.

The new Product Cost Service Bureau leverages aPriori’s Product Cost Management software platform, which provides real-time product cost assessments throughout the entire product development and production process. The software helps manufacturing organizations and suppliers identify quantifiable savings in material, labor and overhead when evaluating alternative designs, manufacturing processes and supply chain sources.

“Most manufacturers generally have a pretty good idea when they are not sourcing at optimal efficiency based on past history and market feedback,” said John Busa, Vice President of Professional Services at aPriori. “The challenge is finding all of those $50,000 needles in the haystack. These new contract services quickly identify which specific parts are over cost, by how much and make recommendations on how to realize those savings.”

Outlier Analysis

aPriori’s Outlier Analysis service quickly identifies which specific parts are the best candidates for simple price changes, from among hundreds or even thousands of different parts, as well as how to justify the price change. The service also highlights price trends among suppliers and parts with common characteristics. The service can typically save manufacturers an average of 3 – 5% of the total product spend analyzed as well as valuable time and resources internally.

The process is very straightforward. The manufacturer provides aPriori with solid CAD models and drawings, production information and current supplier prices. Using its product cost management software and proven outlier analysis techniques, aPriori provides a detailed report to the customer that includes:

* a list of the top outliers – those parts that have the highest cost savings potential;
* specific recommendations on how to justify price changes; and
* weight-based and similar “like part” cost trends among suppliers.

Outlier Analysis Case Study: A leading manufacturer of transport temperature control systems recently engaged with aPriori for an Outlier Analysis program. The project involved running a bulk analysis of their highest volume North American sheet metal spend. The collection of approximately 300 parts represented more than $5 million of annual spend. Using the aPriori product cost management platform and proven analysis techniques, aPriori was able to quickly identify more than 16% savings potential. The entire project took just 12 days from start to finish.

Should Cost Service Bureau

Discrete manufacturers of all sizes often have a difficult time understanding how much their products will cost to build before they release a new design to manufacturing, or send out a request for quote.

Whether it is early in new product development, when the first 3D CAD model has just been created; whether your team is considering an engineering change order and wishes to understand the cost; or whether your sourcing team wants to know what a product should cost before requesting a quote from your suppliers, aPriori’s Should Cost Service Bureau is available to help both engineering and sourcing teams quickly get a benchmark of what their products should cost to manufacture. With this information in hand, you will be in a much better position to achieve target costs and negotiate a fair price with your suppliers. aPriori can create detailed cost benchmarks for products sourced in the United States, Mexico, Brazil, Eastern Europe, Western Europe, China and India.