A New Look
Sellers of goods and services can increase profitability with Should-cost strategies. Wisely used by sellers, Should-cost models develop greater internal visibility that strengthens your capacity to create sustainable solutions that improve profitability.
Visibility Provides More Options
Sellers have the best cost information about their products, but it may not be visible. They should also have the best view of technological and cost optimization opportunities. The Should-cost models clear away the obstructions to clear visibility. It provides the starting point for increasing the value and continuing profitability of your product.
Should-cost Models Build a Roadmap to Sustainable Solutions
Sellers Should-cost Strategy
Successful use of the Should-cost strategy requires a disciplined approach. With a system that fits your company, you can start with being brutally honest about the facts and take the following steps:
- Current state assessment
- Should-cost model build
- Negotiation preparation
- Strategy refinement
- Negotiation Action plan
The Should-cost advantage goes to those best prepared to use the facts. Developing this capability requires experience, Should-cost expertise, and a disciplined negotiation strategy.
Hidden Snares
I have written about things to do, but there are also hidden snares to avoid:
- Standard costing systems that distort actual product costs
- Group-think or closed minds that stifle creativity
- Arbitrary demands by uninformed people
- Misunderstanding Should-cost models
- Failure to prepare
- Bad or old data
- Fear of change
The Complete View
A properly developed Should-cost model provides you with a complete view of your product’s profitability potential. It also brings into view a pathway for continuous improvement so that you can sustain competitive advantages. You can see short-term and longer-term actions to increase your product’s desirability to buyers. Whether it be cost reduction or technology enhancement, the models can help guide you to profitable performance.
Next Steps
I have led the Should-cost negotiation processes with local firms and multi-national global operations on five continents. It has been a rewarding experience. Contact me for a free consultation, and we can discover sustainable solutions to accelerate your profitability.
jay@questigesolutions.com
+1 425 772 0664
