Cost Break Down
To get a better knowledge about cost and cost drivers we use a cost driver analysis tool to identify all cost components of a product.
The tool has several benefits also for the supplier. Since low performance areas are identified, it helps the supplier to strengthen his competitive position on the marketplace. In addition, the tool is not only help for identifying improvement areas but also for monitoring improvements. Therefore we require that our suppliers can provide us with quotation cost break down. One example of a cost break down summary is shown below.