Growing Cost Engineering Excellence

Due to significant competitive pressure, the automotive industry has grown Cost Engineering (CE) as a core capability to achieve a better cost transparency and gain negotiating power. As a result, large cost-modelling departments, staffed by hundreds of highly skilled engineers and equipped with leading tools and databases are chasing the entire supply base to reduce cost.

Competitive pressure to win business is high

Many suppliers are struggling to defend their current prices, resulting in the choice of to either lose future business and market shares or cope with (further) reductions in profit margins. The current transition toward e-mobility also poses significant risk to entire business models.

To face this challenge and secure future competitiveness, suppliers across sectors need to improve CE capabilities.

How we faced this challenge

We supported in ramping-up best-practice CE capabilities by:

• Defining organizational structures, sizes, and capabilities
• Integrating CE in overarching target cost management processes
• Delivering training-on-the job for CE and cross-functional experts
• Piloting the approach across the product portfolio

Phases and major steps to grow cost optimization capabilities toward world-class

Sustainable long-term competitiveness – delivered!

• CE is an accepted expert function for generating cost transparency
• Capabilities cover the full range (i.e. products, tools and investments)
• Cross functional collaboration delivered cost improvements of 15 percent