Manufacturing.net Feature Article Includes aPriori's Azzolino
In the September 2006 issue of Manufacturing.net, manufacturing.net/article/CA6372636.html, manufacturing journalist, Thomas R. Cutler profiles aPriori's cost management platform for Engineer-to-Order manufacturers. According to Cutler, "ETO companies must be able to provide accurate cost estimates to customers, manage all aspects of complex projects, and deliver on time and on budget - all while keeping a close eye on cash flow. There is intense pressure to reduce costs and shorten cycle times, while maintaining high quality.
Finally, ETO manufacturers need an accurate picture of the profitability of each project in order to comprehend the impact on the business. Nowhere are these unique process distinctions (versus those characteristics of repetitive manufacturing) more evident than among manufacturers of conveying equipment."
Cost of Goods Sold (COGS) has become an increasingly important metric as the largest expense item on the income statement; typically 70% to 90% of revenue. Manufacturers are forced to focus on product cost and profit margins with renewed vigor. Cost targets, an important component of design-to-cost strategies, are now being defined early and with greater granularity, even down to the individual component level. Meeting these detailed cost targets at product launch (avoiding expensive, lengthy post-production cost reduction phases) is a new challenge and manufacturers are struggling to find effective systems or tools to assist in this effort. A Cost Management (CM) platform, such as that developed by aPriori, can help manufacturers address the challenges in New Product Introduction (NPI) programs.
In the ETO environment, there are currently two choices for developing business - bid aggressively to win the deal and accept the risk of very low (or negative) margins, or bid conservatively to account for the risk of not fully understanding the impact of the customer's choices on cost, and risk not getting the deal.
According to Frank Azzolino, CEO of aPriori Technologies, a provider of cost management software for the discrete manufacturing industry, "With ETO operations the key is to get it right the first time, since there is often no long production cycle in which to redesign and get the product and cost right over a period of time.
"It is critical to know the costs before bidding the job - thereby preserving margins while more effectively managing risk. Ideally, as early as the sales and marketing departments know the cost of a project, so should the engineering and production departments of ETO operations. This drives margin," said Azzolino.
Based in Concord, MA, aPriori is the technology leader providing innovative cost management solutions to the discrete manufacturing industry. aPriori's Cost Management Software Platform enables manufacturers to better understand product cost decisions early and throughout the product lifecycle. aPriori's Cost Management Platform empowers manufacturers to lower cost-of-goods sold (COGS), provides real-time visibility to "cost-critical" decision information, and builds critical cost knowledge to go on the business "offensive." aPriori's patent-protected cost management platform allows companies to assess, control, and reduce cost of goods sold by whole percentages. The aPriori Platform enables "Cost Knowledge Before it Matters."
aPriori
www.aPriori.com
John Busa
jbusa@apriori.com
978-371-2006
