aPriori Bureau Service

Applied's Professional Services Team is available as an outsource contractor to help you with your product costing requirements. Applied currently offers two distinct aPriori services as part of it's Product Cost Service Bureau:

• Outlier Analysis service will help sourcing teams quickly identify which current quotes for direct spend items are significantly overpriced by batch analysing hundreds or even thousands of parts for should cost and weight-to-cost outliers.

• 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.

Outlier Analysis
Are you struggling with how to achieve your cost reduction goals?

aPriori Outlier Analysis is a short-term services engagement to quickly generate additional profit by cost-reducing parts within a commodity group or product line. Using aPriori's revolutionary product cost management technology, our experts analyse hundreds or thousands of your parts to identify cost-saving opportunities through re-quoting, re-routing or re-design. Designed to quickly capture "low-hanging fruit," the aPriori Outlier Analysis program identifies cost-saving opportunities in three primary areas:

• Sourcing Opportunities - aPriori determines which parts are out of the "cost norm" by comparing aPriori's "should cost" to the current or quoted price. The resulting list of parts become candidates for re-quote or re-bid. Typically, our customers identify hundreds of thousands to millions in savings on parts nearing or currently in production.

• Manufacturing Opportunities - aPriori evaluates current designs to determine if there is a more efficient, lower cost method to manufacture them. aPriori customers realize significant savings by re-routing production parts through a different, less-expensive manufacturing process.

• Re-Design Opportunities - aPriori's experts identify parts which may not be designed as efficiently as possible and therefore result in higher costs. Parts that appear out of the "cost norm" from analyses such as cost vs. mass, but show little difference between aPriori "should cost" and the price being paid become candidates for re-design.

This Outlier Analysis service can be executed against a range of spend and/or parts. The base offering includes analysing a population of parts to identify potential outliers, and then analysing those parts against a range of sourcing and manufacturing alternatives to identify the most cost-effective approach. The service can also be scoped to include an analysis of re-design options for a portion of the parts.

The Methodology
Developed in conjunction with leading discrete manufacturing organisations, an aPriori Outlier Analysis engagement uses a three-step process to identify product cost savings.

• Identify Parts with Cost-Savings Potential - Using basic part information provided by the customer, aPriori analyses each part across multiple dimensions to highlight those where you may be over-paying. Example comparisons include current cost versus mass, current cost versus aPriori "should cost," and aPriori cost versus part complexity. aPriori then compares the historical cost of outliers to aPriori's "should-cost" to determine if the price being paid for the part is higher that it should be.

• Evaluate Re-Quote and Re-Bid Alternatives - The second phase of the program examines alternative sourcing and manufacturing options for the outliers identified in the first phase. Using more detailed information provided by the customer, aPriori performs an in-depth analysis of the parts, examining the cost impact of various sourcing locations, manufacturing processes, routings, machines and production volumes. The resulting output details the cost impact for each alternative explored and highlights the best (lowest-cost) option for each part, allowing your team to understand the trade-offs between decisions and to easily execute the changes.

• Evaluate Re-Design Alternatives - The optional third phase of the aPriori service examines parts that are outside of the "cost norm," yet do not show a significant difference in between aPriori "should cost" and the current price being paid. (This is usually an indication that the part is being manufactured efficiently and priced fairly, and therefore is a candidate for re-design.) In this phase, aPriori works closely with design engineers to drive cost savings by evaluating the cost of new design alternatives. Redesign opportunities include reducing the complexity of the part, reducing material, converting weldments to castings, investigating stampings and more. The output of this phase includes a cost assessment for each design alternative considered with a recommendation on the most cost-effective option.

The aPriori Outlier Analysis service is available now to drive immediate results. Pricing is based on number of parts evaluated and overall part complexity. Manufacturing processes supported include sheetmetal, progressive die, bar & tube fabrication, die-casting, sand-casting, permanent mold casting, injection-molded plastic, machining, welded assemblies, mechanical assembly and more.

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 UK, Eastern Europe, Western Europe, USA, China, India, Mexico and Brazil.

aPriori's Should Cost Service Bureau is available for discrete manufacturers of all sizes. The cost for this service is determined by evaluating the quantity and complexity of parts to be costed.

aPriori can provide the Should Cost Service as a single engagement, or as a subscribed service where the customer can submit an agreed volume of parts for costing every month or every quarter.

For more information, please select the Contact tab or Enquiry panel and we will contact you within 24 hours to provide you with a more detailed presentation of how this service could work for your company.

Documents

aPriori Bureau Service Data Sheet An overview of our aPriori bureau service 234kb