Improving the costing performance in the aerospace industry for metal machined components

Client background

Our client, a leading manufacturer of airplane components, was looking for ways to optimize its purchasing performance and improve it’s time-to-market. Their main focus at first was their huge category of metal machined components of various sizes and weights.

Our way of costing

Defining Cost-drivers

in easyKost, costing is looked at from a Top-down approach. The main drivers for the cost of a component are the technical and commercial caracteristics of it.

For a category of products like ‘Metal machining’, attributes like the dimensions, the supplier, the annual quantity, the raw material and the surface treatment were the top cost-drivers for our client. 

Using the model for costing

Using the database provided by the client, a costing model was created on easyKost. This model was then used by different Cost managers accross many Business Units to make cost predictions for new components that had to be purchased.

The following were the most received feedbacks from the regular users of the model :

• Unmatched costing speed
• Supplier Very convenient for analyzing What-if scenarios
• Consistent accuracy even when pushing the model beyond its comfort zone

Application to client’s other categories

The same logic and process were used on many other categories of products for this client which will be shown in a separate Business case

Results

Many metrics were used to track the progress. The below numbers are the main takeaways of this business case: