What a should-cost model is
A should-cost is a bottom-up estimate of what a part should cost to produce at a capable supplier: material at current index, process steps and cycle times, machine and labor rates for the region, scrap, overhead, logistics, and a fair margin. It turns a price negotiation into a conversation about the numbers instead of the relationship.
For hard-tech programs it does a second job: it sets credible target costs before the first RFQ, so engineering and finance agree on what a part is worth while the design can still change.
What we model
- Metals: high-pressure and gravity castings, forgings, stampings, CNC machined parts, extrusions, tube and wire forming
- Plastics and composites: injection molding, overmolding, thermoforming, carbon fiber layups
- Electronics: PCBA, harnesses, connectors, power electronics subassemblies
- Battery and energy: cells, modules, busbars, thermal interface materials, enclosures
- Tooling and CapEx: molds, dies, fixtures, and automation cells, including amortization strategy
How it runs
We start with drawings, volumes, and current quotes for the parts that matter most, usually the top 20 percent of spend that carries 80 percent of the gap. Each model is built in a spreadsheet your team owns, with every assumption visible and sourced: alloy and resin indices, regional labor and machine rates, cycle times validated against comparable processes.
Then we use it. We review the cost breakdown with the supplier, line by line, and agree where the model and their reality differ. The output is a negotiated price, an index clause where material dominates, and a model your buyers can update the next time the volume or the design changes.
What you get
- Should-cost models for the priority parts, in Excel, fully traceable
- A gap report: quoted versus should-cost by part and supplier, with annualized dollars
- Negotiation packs for the top opportunities
- Index-linked pricing clause language where commodity exposure is above about 30 percent of piece price
- A short training session so your team can maintain the models