Chapter from: "The Cost: A Business Novel to Help Companies Increase Revenues and Profits"
Published by:
Business Expert Press
Length: 40 pages
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Abstract
This chapter is excerpted from 'The Cost: A Business Novel to Help Companies Increase Revenues and Profits'. The Cost is a story of a cost engineering consultant named Doug Benson who does his best to help companies understand and improve cost. When Doug arrives at Electronica, the company is on a verge of bankruptcy and hardly even knows why. He must use all his cost engineering knowledge and leadership skills amidst some considerable corporate drama all the while fighting his own personal demons in order to give Electronica a chance. The type of situations that he finds himself in are happening all over the world every day and the results are often dramatic with people losing jobs, stakeholders losing millions of dollars, and communities losing hope. The Cost aims to describe a cost engineering process and expose the many things that can go wrong with it. Although the story and characters are fictional, the events are based on real occurrences. If these seem familiar to the reader, it is probably because they happen daily across thousands of global companies in many different manufacturing industries. Making money is not always straight forward. Having a great product that people want usually helps, but understanding your own cost is critical to success for most companies. Unfortunately, it is much too often that companies do not understand their own cost, which leads to lost opportunities to win business and to make money. In most severe cases, lack of cost engineering capability or its misuse can lead to failed businesses. The Cost demonstrates various cost engineering methodologies and tools. Starting with the concepts of cost estimating, which is a necessary navigational tool for a cost engineer, to cost controlling and to various cost optimization tools, such as cost reduction workshop and gap analysis, cost engineering requires a spectrum of activities to assure the lowest possible cost. The cost engineering process requires disciplined control throughout the product development process and throughout the complete life cycle of a product. Gate reviews during product's development are common for many companies, but cost optimization efforts should also be part of the process. It is too late to start those activities only after the design is finalized, or worse, after the tools are built. Cost optimization must take place as early as the concept design. It is not enough to build a product that works, it must also cost only as much as the price and profit requirements dictate. The Cost is not only for those in the cost engineering field. This book is for everyone that is in a manufacturing business or any other kind of business for that matter. It is for engineers, buyers, sales reps, accountants, operations folks, and business consultants. This book is also for anyone that is leading a business and has the power to employ cost engineering to make their company successful. If you are a CEO, or a COO, or a General Manager, please stop and consider whether you truly understand your cost and ask yourself if you are doing everything in your power to optimize it. Give those in your organization that fight daily to understand and improve cost the respect that they deserve. Acknowledge, promote, and pay them just like everyone else.
About
Abstract
This chapter is excerpted from 'The Cost: A Business Novel to Help Companies Increase Revenues and Profits'. The Cost is a story of a cost engineering consultant named Doug Benson who does his best to help companies understand and improve cost. When Doug arrives at Electronica, the company is on a verge of bankruptcy and hardly even knows why. He must use all his cost engineering knowledge and leadership skills amidst some considerable corporate drama all the while fighting his own personal demons in order to give Electronica a chance. The type of situations that he finds himself in are happening all over the world every day and the results are often dramatic with people losing jobs, stakeholders losing millions of dollars, and communities losing hope. The Cost aims to describe a cost engineering process and expose the many things that can go wrong with it. Although the story and characters are fictional, the events are based on real occurrences. If these seem familiar to the reader, it is probably because they happen daily across thousands of global companies in many different manufacturing industries. Making money is not always straight forward. Having a great product that people want usually helps, but understanding your own cost is critical to success for most companies. Unfortunately, it is much too often that companies do not understand their own cost, which leads to lost opportunities to win business and to make money. In most severe cases, lack of cost engineering capability or its misuse can lead to failed businesses. The Cost demonstrates various cost engineering methodologies and tools. Starting with the concepts of cost estimating, which is a necessary navigational tool for a cost engineer, to cost controlling and to various cost optimization tools, such as cost reduction workshop and gap analysis, cost engineering requires a spectrum of activities to assure the lowest possible cost. The cost engineering process requires disciplined control throughout the product development process and throughout the complete life cycle of a product. Gate reviews during product's development are common for many companies, but cost optimization efforts should also be part of the process. It is too late to start those activities only after the design is finalized, or worse, after the tools are built. Cost optimization must take place as early as the concept design. It is not enough to build a product that works, it must also cost only as much as the price and profit requirements dictate. The Cost is not only for those in the cost engineering field. This book is for everyone that is in a manufacturing business or any other kind of business for that matter. It is for engineers, buyers, sales reps, accountants, operations folks, and business consultants. This book is also for anyone that is leading a business and has the power to employ cost engineering to make their company successful. If you are a CEO, or a COO, or a General Manager, please stop and consider whether you truly understand your cost and ask yourself if you are doing everything in your power to optimize it. Give those in your organization that fight daily to understand and improve cost the respect that they deserve. Acknowledge, promote, and pay them just like everyone else.