Zero Based Costing backed by xcPEP

Zero-Based Costing is a strategic cost management approach where costs are analyzed and justified from a "zero base" without considering historical expenditures. Zero-Based Cost of a manufactured product consists of item wise detailed cost of raw material,  manufacturing process, tooling and overheads.

This method ensures that each cost incurs scrutiny and must be justified without referring to previous spend. This rigorous analysis empowers organizations to identify and eliminate unnecessary expenses, optimize resource allocation, and set precise target costs for products and services.

xcPEP zero based costing view

Excel fails at scale in Zero Based Costing

Excel has several limitations when used for conducting organization wide zero based costing of thousands of parts from hundreds of suppliers from dozens of different geographies. Below are the some of the challenges in using Excel for zero based costing.

Standardization

Excel's flexibility can lead to inconsistent templates, hindering cost analysis and decision-making in zero-based costing.

Collaboration

Limited collaboration features in Excel can result in data conflicts and miscommunication, essential for cross-functional teams in zero-based costing.

Version Control & Updates

Excel lacks robust version control, making it difficult to track changes and maintain accurate, up-to-date budgets.

Handling Large Data

Excel struggles with large datasets, impacting performance and data analysis. Specialized software like xcPEP is more suitable for zero-based costing.

Capacity Ramp Up & Down

Advanced Structures India offers a flexible zero-based costing service adjusting capacity to match your needs, so you only pay for what you use.

CAD based costing tools fail in detail

Such software is generally designed for providing a rough zero based cost estimation to designers while they are designing a part. These estimates lack the granularity, depth, accuracy and dependability required by cost engineering and procurement teams while negotiating with different stakeholders. xcPEP is built from scratch for cost engineering and procurement teams.

Made for Designer

CAD-based zero-based costing tools are designed primarily for designers and focus on predicting manufacturing steps from CAD models.

Inaccurate for Costing Team

CAD based zero based costing tools do not have the accuracy required by dedicated cost engineers.

Limited Depth

They lack the granularity required for mapping manufacturing processes and inputs, making them inadequate for cost engineers.

Low Flexibility

Cost engineers require flexibility for detailed real-time analysis, accounting for variables like raw material costs, design changes, product options, locations, and suppliers.

Unsuitable for Negotiations

CAD based zero based costing tools lack the detail needed for supplier negotiations.

Unsitable for Decisions

CAD based zero based costing tools also lack the precision to be used as a reference for engineering and commmercial decisions.

How Advanced Structures India's Zero Based Costing service helps?

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Private Libraries

We create customer-specific private libraries of cost drivers and affecting factors, enabling more accurate cost estimation over time.

High Levels of Automation

Our costing models streamline the cost estimation process, reducing manual work and ensuring frugal and efficient results.

Reusable Components

Each parameter in our cost models is treated as an individual reusable component, ensuring updates are tracked and available for historical analysis.

Scenario Costing

With automation and reusable components, we enable quick and cost-effective cost scenario simulations, leading to more cost-saving opportunities.

Teardown Data as Input

Zero-Based costing involves teardown studies on your products and competitors, enhancing the accuracy of cost estimates.

Costing Parameters

We consider overheads, manufacturing costs, and raw material costs, material grades, manufacturing processes, and high-cost finishing processes.

Third-Party Databases

We collaborate with leading database companies to acquire region-specific labor and other databases, ensuring precise costing data.

Quick Adaptation

ur cost models quickly adapt to your supplier base, ensuring that changes and their effects are accurately calculated.

Costing at Virtual Proto

We map part and process data at the CAD or virtual prototype stage, offering zero-based cost estimates that take into consideration all relevant factors.

VA/VE at Design Stage

We enable cost reduction at the design stage, enhancing decision-making and eliminating surprises at the 'Start of Production' stage.

Engagement Models for Zero Based Costing Services

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Costing Projects

Suitable for smaller organizations or short term requirements

You can engage with us for specific projects, allowing you to benefit from our zero-based costing competence as needed.

  • Continue to use xcPEP and run scenarios even after the project.
  • Collaborate with colleagues
  • Run your own cost reduction exercises

Managed Costing Service

Cost effective solution for larger organizations with sustained requirement

For a more comprehensive solution, we offer annual fixed contract-based services, taking on the zero-based costing function for your organization. This managed service ensures ongoing cost control and optimization.

  • Dedicated team for your organization.
  • More precise mapping of your locations and norms.
  • Ramp up and down as per requirement.

Our Role in Zero-Based Costing

Digitization and Automation

At Advanced Structures India, we work with you to perform zero-based costing on your products and competitor's products. Our approach is rooted in first principles and publicly available information, and we focus on bringing speed and efficiency to the table. While we collaborate with leading database companies to buy relevant datasets, we are not a database company and we do not sell any datasets.

Do we provide benchmark database?
No.
Who owns the data on xcPEP?
Our customers own their data while it is on xcPEP. You can exit anytime by exporting everything in excel format.
Do we do costing services without xcPEP?
No.
Do we conduct trainings?
For customers who are onboard xcPEP, we conduct training sessions for better utilization of our output and software platform's capabilities.
Do we provide costing manpower?
No.