Most cost estimates are static

Cost information in most organizations is fragmented throughout the enterprise. Critical pieces of cost information are spread across independent silos within an organization in different functions like engineering, planning, manufacturing, sourcing, finance. This situation typically results in estimates that do not include all relevant information required to make accurate and predictive product cost assessments.

In most organizations product cost estimates are developed by specialized organizations in cost engineering or VA/VE departments. In most cases, these cost estimates are created separately and independently of the people making the design, manufacturing, and sourcing decisions. This separation results in many decisions being made in a cost knowledge vacuum. The impact of these decisions is typically not known for at least a full financial period after production is well underway.

Product cost estimates (especially early ones) are often based on historical information or very general heuristics (e.g. weight) and are too inaccurate and lack statistical confidence for effective decision making.

Most cost estimating activity falls on a relatively small group of specialized people spending hours manually producing each estimate. Since the demand for costing feedback cannot always be met, the opportunity to experiment with the cost impact of design, manufacturing, planning, sourcing, etc. alternatives is limited and can not be readily cost optimized.

Most cost estimates are static and are not continually updated when new design, manufacturing, planning, or sourcing information becomes available as the product progresses through its design-to-production-to-delivery lifecycle. Out-of-date cost information can not be relied upon for downstream decision making.

​Costing practices are not always standardized across the enterprise. As more information is available, different costing practices and methods

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