{"id":66750,"date":"2025-11-06T13:24:09","date_gmt":"2025-11-06T18:24:09","guid":{"rendered":"https:\/\/www.apriori.com\/?post_type=podcast&p=66750"},"modified":"2025-11-07T12:07:02","modified_gmt":"2025-11-07T17:07:02","slug":"executive-podcast-getting-cost-right","status":"publish","type":"podcast","link":"https:\/\/www.apriori.com\/podcast\/executive-podcast-getting-cost-right\/","title":{"rendered":"Podcast: Getting Cost Right the First Time"},"content":{"rendered":"

Sam Freesemeyer is an agricultural engineering executive with more than 40 years of experience in machinery design and product management. In this podcast, he explains why so many engineering teams end up reworking designs late in the process\u2014and how integrating cost assessment into every stage of product development helps teams get to market faster without sacrificing the features that make products sell.<\/p>\n

Executive Experience: Cost Creeps into Engineering<\/h2>\n

Sam Freesemeyer:<\/strong> I’m an agricultural engineer who has worked in the ag machinery sector for the last 40-plus years, primarily in engineering and product management. I worked for AGCO Corporation<\/strong> as Vice President of Engineering in a number of global roles, and I\u2019ve seen a lot of different experiences with engineering teams developing and maintaining new products. Cost is always a big portion of that design effort. Whether we know it or not, a lot of times that cost shows up as cost overruns at the end of a project\u2014we haven\u2019t hit our targets, so we go back and redesign to try to achieve cost targets that would have been better addressed during initial development.<\/p>\n

When you go back and cost-reduce after the fact, there are a lot of hidden costs in that. First, the cost of redoing engineering that you\u2019ve already done\u2014so you\u2019ve expended that effort twice, which reduces how much you can actually spend on new features. Second, you\u2019ve got design changes coming after your validation program, so you\u2019re not validating these designs as well. That means you\u2019re going into production late, over cost, and with potentially unvalidated or less validated changes because they came late in the testing program.<\/p>\n

If you can focus on getting the cost right at the beginning of your NPI project, you save yourself time and money in many ways.<\/p>\n

The Biggest Problem: Accurately Costing Design Changes<\/h2>\n

The biggest problem we ran into in the teams I\u2019ve led when doing cost-based design upfront was getting a good scoring on what the cost of the design was. We\u2019d have two or three alternatives\u2014which is the best cost? And where are we in the overall cost of the machine as we proceed through the project?<\/p>\n

A lot of times, the work that you\u2019ve put into the machine will achieve 70 or 80% of a new feature you\u2019d like to add, and you just go ahead and throw that in without realizing you\u2019re already over cost\u2014then you have to take it out later. Or you may find that you\u2019re actually achieving your cost, you\u2019re under target, and you could have added that extra feature but didn\u2019t know it. Having a good grasp on your cost as you\u2019re designing saves you money and gives you more capability to optimize the amount of new feature you can put into the machine.<\/p>\n

Four Dimensions of Product Design<\/h2>\n

There\u2019s a saying in engineering circles: you can have cost, timing, or quality\u2014but you can only pick two.<\/em> I actually don\u2019t buy into that. There are four dimensions I always look at: content<\/strong>, cost<\/strong>, timing<\/strong>, and quality<\/strong>. If you maintain pressure on all four of those dimensions through the project, you really can get a better balance of all four. If you\u2019re just looking at content and timing because you want to get to production, you\u2019re going to lose on cost or quality.<\/p>\n

That\u2019s why there are so many tools for predicting and evaluating quality upfront\u2014in simulations and then through physical testing. Timing is easy; you just look at your calendar. But how do you really assess cost as you go through a project? Having a good, objective basis for establishing the cost of every part\u2014and having that done automatically\u2014gives you the ability to maintain a continuous roll-up of the cost of your machine and know where you are at any given point in the project. That\u2019s information you can use to make decisions.<\/p>\n

In the manufacturing space\u2014industrials and off-highway equipment, where I\u2019m most familiar\u2014engineering investment tends to be a percentage of revenue, maybe three, four, or five percent. That\u2019s what we devote to R&D. If I\u2019m wasting that time doing the same work two or three times, that\u2019s work I can\u2019t spend on additional features. If I put the tools in place to get cost right the first time, I have all that available resource to deploy on the next features on my to-do list.<\/p>\n

Bulk Costing Accelerates Product Improvements and Market Share<\/h2>\n

There\u2019s an infinite list of things we\u2019d like to have in the product. We just have to prioritize. We make that prioritized list and draw a red line when we run out of budget. But if I can move that red line down about 30% more, think of how much more new content I can bring to market\u2014and how much faster I can accelerate our attempt to gain market share or customer satisfaction.<\/p>\n

I really need to have a way of looking at the whole of my spend\u2014volume-weighted\u2014to decide where I should spend my time, and then go do those things. But in order to do that, I need an accurate cost across my whole spend. This is where a bulk-costing tool can provide base data from which I can plan my current product maintenance and cost reduction activities.<\/p>\n

One of the first things I\u2019d like to do is ask: where is the opportunity? Is there a segment of my spend where the margins are dangerously thin? Is there a segment where I\u2019m losing market share to a lower-priced competitor? Within that, where\u2019s the biggest bang for my buck? What\u2019s the highest cost opportunity times volume that\u2019s going to make those engineering dollars I spend pay back the most? Because my engineering dollars are always finite, I want to pick my battles where they\u2019ll do the most good.<\/p>\n","protected":false},"featured_media":56057,"template":"","topics":[],"pillars":[43],"class_list":["post-66750","podcast","type-podcast","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"\nExecutive Podcast on Getting Cost Right<\/title>\n<meta name=\"description\" content=\"Why design teams often face costly rework late in development\u2014and how building cost assessment into every stage can prevent it.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.apriori.com\/podcast\/executive-podcast-getting-cost-right\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Podcast: Getting Cost Right the First Time | aPriori\" \/>\n<meta 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