As reaction on a post about should cost modeling, I wrote the following:


I think ‘the doctor’ got a good point here, that you not only should use the should cost model for negotiating better deals, but also really dive into the cost and look for the most expensive cost components. Or as I stated it on my blog about should cost models: aim for the low hanging fruit first. Which means that you look to the most expensive cost components, making the assumption that it is at these components where the most euro’s (or any other currency) are and so the most amount of money can be reduced here. But you also need to take into account how much effort is required to realize those reductions. The tradeoff must be made whether the reduction itself outweighs the costs to realize the reduction.

Parallel to or in extension of what ‘the doctor’ said, I think the should cost model should even be taken a step further; in cases in which it is possible (!) use it for cooperation with your supplier and not just for negations. Take your supplier relationship a step further.