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Purchase Price Analysis

The role of procurement extends to the design of product characteristics, value-added processes, and supplier structures. Therefore, the purchasing process has a high impact on cost and influences technology, quality, and time to market for the end product.

Without a detailed understanding of cost structures along the various stages of a supply chain, sustainability, and innovation are no longer possible. The primary goal of procurement is to efficiently generate added value and cost savings for the company. This is often prevented through the disconnection between cost engineering and procurement based on gaps such as non-standardized methods and disconnected processes within purchase price analysis.

Purchase price analysis enables you to negotiate future target prices or purchase prices based on reliable cost details.

Purchase price analysis with Teamcenter product costing

The purchase price analysis enables you to build accurate should cost models to support the procurement within supplier negotiations. Teamcenter has a high practical value, especially for completely unknown and as well-known processes, to prepare bottom-up cost calculations within the purchase price analysis. You can use the database included for reference information such as machines, labor costs and manufacturing processes. These details provides you the opportunity to identify the most cost-effective manufacturing process and to present it in a transparent manner for all involved parties. Different manufacturing processes can be defined and evaluated in detail with the integrated cycle-time calculator. The cost breakdowns gain transparency and can be used as an effective tool for negotiations because they allow detailed comparison of the quotations. You can compare the calculated should cost with the received supplier cost breakdowns. This provides best business practice for procurement and cost engineering to collaborate on successful negotiations.

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Your benefits

The purchase price analysis enables you to not only determine a reasonable purchase price and arguments for its implementation, it also enables you to make constructive suggestions to reduce costs, thus creating an objective and fact-based foundation for collaborative cost reduction. Using the purchase price analysis of the Teamcenter product costing solution, you can generate significant cost savings in projects with your suppliers and generate added value for your company.