Cost Management: Intent Means Everything

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SUPPLY CHAIN
Cost Management: Intent Means Everything by Paul Ericksen | Dec 11, 2019

Do you wonder how an OEM would react if a potential end-use customer asked them to define their costs and profit margin prior to their buying decision?

The October 16 article Dullsville Just Got Interesting struck a nerve with me. It laid out the various approaches to Cost Management and how OEMs could apply related cost analysis in negotiations.  In case you are new to the concept, Cost Management is where OEM customers determine what the parts they are sending out for quote should cost. That’s all fine and good.

Unfortunately, the underlying intent behind how OEMs apply Cost Management—at least in my experience—doesn’t always align with the price they should anticipate from their best suppliers. In fact, the intent of some OEMs—which will be laid out below—is to bastardize the whole Cost Management process to their own advantage.

Let’s be clear up front...........................Click here to access complete Ericksen's article