BACKGROUND
Customers have noted significant cost discrepancies, which are hurting sales of the weapons system for which we have been commissioned to perform Design-to-Cost. A cost target has been set to ensure competitiveness in future bids, with a 40% cost reduction required compared to the baseline quote.
THE IAC APPROACH
- Analysis of the economic benchmark and development of a "should cost" model using our proprietary tools,
- Organizing brainstorming workshops with our partner's teams and suppliers,
- Grouping ideas into scenarios of increasing effort and evaluation by the teams,
- Cost estimates for additional outsourcing scenarios.
RESULTS
- The short- and medium-term scenarios project gains of 15 to 20 percent, taking one-time costs into account in the calculation,
- An outsourcing scenario, incorporating the ideas from the medium-term scenario, makes it possible to achieve the approved target of 40% and to additionally include an offset component for the program.
