Should Cost Manager

Job Summary:

The Should Cost Manager is responsible for developing cost models to analyze and predict the true cost of materials, components, and assemblies. This role works closely with sourcing, engineering, product management, product development, and finance teams to ensure cost transparency, improve supplier negotiations, and drive cost optimization strategies. The ideal candidate has strong analytical skills, manufacturing cost knowledge, and experience in cost estimation techniques.

Key Responsibilities:

• Develop and implement Should Cost models to analyze material, labor, overhead, and profit margins for key components and products.
• Conduct cost breakdown analysis for direct and indirect procurement categories to ensure competitive pricing.
• Partner with sourcing, engineering, product management, product development, and finance teams to provide cost insights for supplier negotiations and product cost reduction.
• Evaluate supplier quotations by benchmarking against internal and industry cost models.
• Identify cost drivers in manufacturing processes and suggest cost-saving opportunities.
• Collaborate with suppliers to improve transparency in pricing structures and cost drivers.
• Utilize cost engineering tools such as parametric modeling, regression analysis, and market intelligence to estimate costs accurately.
• Support New Product Development (NPD) and Value Engineering (VE) initiatives by providing cost estimates during the design phase.
• Monitor raw material price trends, labor rates, and currency fluctuations to assess cost impact.
• Present cost analysis reports and insights to senior leadership and procurement teams.

Qualifications & Experience:

• Bachelor’s degree in Engineering, Supply Chain, Finance, or related field (Master’s degree preferred).
• 5+ years of experience in cost modeling, cost engineering, procurement analytics, or a similar role.
• Strong understanding of manufacturing processes, cost structures, and supply chain management.
• Proficiency in cost estimation tools, data analytics software (Excel, Power BI, Tableau), and ERP systems (SAP, Oracle, etc.).
• Experience in supplier negotiations and cost reduction strategies.
• Strong analytical, problem-solving, and communication skills.
• Ability to work cross-functionally with procurement, finance, and engineering teams.

Preferred Skills:

• Experience in Should Cost modeling in industries like automotive, aerospace, electronics, or industrial manufacturing.
• Familiarity with Design-to-Cost (DTC) and Value Analysis / Value Engineering (VA/VE) methodologies.
• Knowledge of raw material pricing trends and market intelligence tools.

Activities:

1. Data Collection & Cost Modeling

• Gather raw material costs, labor rates, overhead expenses, and profit margins.
• Develop and maintain parametric and bottom-up cost models.
• Use industry benchmarks and internal cost databases for analysis.

2. Manufacturing Process Analysis

• Study supplier manufacturing processes to identify cost drivers.
• Assess material utilization, cycle times, labor efficiency, and machine costs.
• Identify waste, inefficiencies, and areas for cost optimization.

3. Supplier Cost Analysis & Benchmarking

• Analyze supplier quotes and cost breakdowns.
• Benchmark supplier pricing against internal and industry standards.
• Develop cost negotiation strategies based on Should Cost insights.

4. Value Engineering (VE) & Cost Reduction Initiatives

• Conduct Design-to-Cost (DTC) and Value Engineering (VE) workshops.
• Identify alternative materials, processes, and design changes for cost savings.
• Work with R&D and engineering teams to improve product cost efficiency.

5. Cost Estimation for New Product Development (NPD)

• Provide Should Cost estimates for new designs and prototypes.
• Support early supplier involvement (ESI) in cost discussions.
• Assess cost feasibility of new product features and specifications.

6. Market & Cost Driver Analysis

• Monitor raw material price trends, labor rates, energy costs, and currency fluctuations.
• Analyze regional cost variations for sourcing decisions.
• Track economic factors impacting supplier costs.

7. Cost Reporting & Decision Support

• Generate Should Cost reports for leadership and procurement teams.
• Support fact-based supplier negotiations with cost transparency.
• Provide cost insights for strategic sourcing and supplier selection.