Procurement often has several quotations for a component or assembly.
A price comparison shows which supplier offers the lower price.
However, it does not automatically explain:
Why do the prices differ?
A technical understanding of costs is therefore helpful for a well-founded discussion.
What Information Can Be Checked?
Depending on the component, for example:
- Material
- quantity of material
- manufacturing process
- cycle time
- machine concept
- Tooling
- scrap
- surface treatment
- Assembly
- inspection effort
- packaging and logistics
Not all information is directly available from a quotation.
Technical Plausibility Instead of Apparent Precision
Cost breakdown and should costing can help to model a plausible cost range.
This range is based on assumptions.
It should therefore not be presented as an exact reconstruction of the supplier's cost calculation.
Its strength lies in the question:
Which technical factors would have to apply for this price to make sense?
Price Differences Can Have Objective Reasons
A higher quotation may, for example, be due to:
- a different process design
- a smaller batch size
- higher quality requirements
- lower capacity utilisation
- additional inspections
- a different material source
- investments
- higher risk
A cost analysis should therefore not automatically be used as a negotiating argument against the supplier.
Technical Collaboration Instead of Price Negotiation Alone
The analysis becomes particularly interesting when the supplier can contribute their own improvement proposals.
Examples:
- adjusting a tolerance
- changing the material
- using a standard process
- designing the geometry for easier manufacture
- integrating several parts
Price plausibility checking then turns into joint cost optimisation.
Link to Value Analysis
If a component remains expensive even after technical optimisation, a more fundamental question may be needed:
Do we need this solution in this form at all?
This is where the function-oriented approach of Value Analysis comes in.