Apriori
Why Discrete Manufacturers Take a “Rear View” Look at Product Costs
According to Frank Azzolino, President & CEO of aPriori, the Massachusetts based Cost Management Platform company, “There are a number of reasons why discrete manufacturers have been forced to take a “rear view” look at product costs, such as evaluating and allocating product costs well after production was underway.”
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, etc. 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 Out-of-date cost information can not be relied upon for downstream decision making.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 are used to re-cost items. Unfortunately this makes it difficult to leverage previous estimating work and build traceability in product cost accrual.
Typically cost estimates are not managed through a product’s development through production lifecycle. Multiple cost estimates from different sources are created as different times during the process. It becomes unclear which product cost estimate is current or valid.
Today’s cost accounting methodologies begin with the financial statement for the prior closed financial period. The costs in that period are then allocated across various product lines and processes which are then further allocated for each individual product. These are by definition “rear view” mirror product costs.
aPriori’s Cost Management Software Platform enables manufacturers to better understand product cost decisions early and throughout the product lifecycle. aPriori’s Cost Management Platform empowers manufacturers to lower cost-of-goods sold (COGS), provides real-time visibility to “cost-critical” decision information, and builds critical cost knowledge to go on the business “offensive.” aPriori’s patent-protected cost management platform allows companies to assess, control, and reduce cost of goods sold by whole percentages. The aPriori Platform enables “Cost Knowledge Before it Matters.”
aPriori Examines How Discrete Manufacturers Look at Product Costs
Discrete manufacturers have been forced to take a “rear view” look at product costs, such as evaluating and allocating product costs well after production was underway.
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, etc. 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.
According to Frank Azzolino, President & CEO of aPriori, the Massachusetts based Cost Management Platform company, “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 are used to re-cost items. Unfortunately this makes it difficult to leverage previous estimating work and build traceability in product cost accrual.
Typically cost estimates are not managed through a product’s development through production lifecycle. Multiple cost estimates from different sources are created as different times during the process. It becomes unclear which product cost estimate is current or valid. Today’s cost accounting methodologies begin with the financial statement for the prior closed financial period. The costs in that period are then allocated across various product lines and processes which are then further allocated for each individual product. These are by definition “rear view” mirror product costs.
aPriori’s Cost Management Software Platform enables manufacturers to better understand product cost decisions early and throughout the product lifecycle. aPriori’s Cost Management Platform empowers manufacturers to lower cost-of-goods sold (COGS), provides real-time visibility to “cost-critical” decision information, and builds critical cost knowledge to go on the business “offensive.” aPriori’s patent-protected cost management platform allows companies to assess, control, and reduce cost of goods sold by whole percentages. The aPriori Platform enables “Cost Knowledge Before it Matters.”
Apriori Technologies Cost Management Implementation Team Growing
The aPriori cost management platform uses innovative, patent protected technologies, and is capable of using design information driven off of MCAD geometry. Additionally the ability to model production facilities (including machine capabilities, raw materials, and facility cost structure) and the specific cost accounting methodologies, accurate predictive, allow “forward looking” real time cost estimates.
The firm anticipates huge staff growth for the remainder of 2006. The firm is presently looking to add Project Managers. A Project Manager is a key member in an implementation team that delivers the aPriori cost management platform to a customer and assists the customer, driving quantifiable value in their organization. Project Managers are responsible for managing the timeline, project scope, and deliverables to drive customer satisfaction and referenceability. They will collaborate with the Account Executive to ensure the implementation plan is aligned with the overall account strategy.
Implementations are typically short-term engagements lasting twelve weeks and require a combination of working at the customer facility and at aPriori’s Concord office. 40 to 60% travel is required.
Required background:
…BS or BA and 7+ years experience in functional or technical role.
…Proven track record of successfully managing software implementations within schedule and budget, and contributing to highly satisfied, referenceable customers.
…Strong understanding of software development and implementation methodologies.
…Excellent written and verbal communication skills.
…Demonstrated ability to work and communicate with varying levels and multiple functions (i.e., accounting, purchasing, manufacturing, engineering, management) within a customer organization.
…Must be results-driven, have a positive attitude, and be a team player. The role will require strong organization skills and the ability to balance multiple activities.
…The ideal candidate would thrive in an environment where they have the opportunity to join a company on the ground floor and be part of the core team to drive success with early customers and refine our implementation methods and tools.
…Experience in design engineering, manufacturing, purchasing, accounting, or consulting within these disciplines and / or a BS in Mechanical, Industrial, or Manufacturing Engineering or a closely related field a strong plus.
aPriori’s Cost Management Software Platform enables manufacturers to better understand product cost decisions early and throughout the product lifecycle. aPriori’s Cost Management Platform empowers manufacturers to lower cost-of-goods sold (COGS), provides real-time visibility to “cost-critical” decision information, and builds critical cost knowledge to go on the business “offensive.” aPriori’s patent-protected cost management platform allows companies to assess, control, and reduce cost of goods sold by whole percentages. The aPriori Platform truly enables “Cost Knowledge Before it Matters.”
“aPriori has customers in a variety of industries including High Technology, Industrial Equipment, Automotive, and Heavy Machinery. Recent customers include John Deere, Panasonic, Thomas & Betts, Flextronics, JLG, and Dana Corporation.”