Cost Intelligence
Should-Cost Analysis
We model the supplier's cost structure: materials, labour, overhead, margin. We show what a product or service should cost based on real cost drivers - not the price the supplier quoted. The foundation of any fact-based negotiation.
Negotiations based solely on experience become unpredictable as market volatility increases.
Problem
Where organisations get stuck
Negotiations without knowledge of the supplier's real cost structure
No argumentation for rejecting price increases
Uncertainty whether prices are fair against market structure
Approach
How engagements work
- 01
Inventory of product/service cost components
- 02
Market analysis of raw material, labour and overhead prices
- 03
Cost structure modelling and should-cost calculation
- 04
Negotiation argumentation and scenario development
Results
What changes operationally
- 01
Product/service cost model broken down by components
- 02
Market "should cost" as a negotiation reference point
- 03
Negotiation scenarios and recommended opening position
Format
- Engagement format
- 1-3 week analysis per category; Excel model with methodology documentation.
- Capability area
- Intelligence
See also
Related areas
SPOT Analysis
Advisory
Negotiation Preparation
Negotiations
Supplier Benchmarking
Intelligence
Let's talk about what this looks like in your organisation.