- Manufacturing & Industrial Goods
Cutting Costs & Improving Efficiency: Should Cost Modeling of Mechanical, Electrical, & Electronics Components Across Countries in Flow Control and Pump Industry
Challenge
A leading Flow Control and Pump OEM aimed to open a new manufacturing facility in China. Their internal team had created high-level should-cost models using data from existing suppliers in Hungary. However, management sought external validation due to discrepancies in cost drivers, including supply chain expenses and unforeseen costs in transitioning from Hungarian to Chinese suppliers.
Solution
A detailed cost estimation model was developed by identifying and analyzing necessary raw materials (type, grade, color, weight) for plastic and metal parts across components. This included gathering inputs on raw material rates, labor, and electricity costs in China and Hungary, as well as insights into manufacturing processes like casting and injection molding. The model accounted for variables, such as machine rates, bought-out parts (BOP) costs, and tooling, while a macro-enabled dashboard provided insights into cost structures and manufacturing efficiency across countries.
Testimonial
“STATXO’s support transformed our production cost management. Their accurate cost estimations and comprehensive regional analysis improved our budgeting, reduced cost overruns, and strengthened our negotiation position. The macro-enabled dashboard provided real-time analysis, making cost monitoring and reporting much more efficient. We highly recommend STATXO for their impactful solutions and expertise.” – Director, Procurement
Overview
Discover how STATXO enabled a leading Flow Control and Pump company to refine cost projections for a new facility in China.
Impact
The client achieved a more accurate estimation of production costs, which improved financial planning and reduced the risk of overruns. The macro-enabled dashboard provided analysis of cost components, offering flexibility in monitoring variations and optimizing supplier negotiations. This empowered the client to make informed decisions regarding pricing, supplier selection, and production strategies.
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