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Integrated Cost Reduction

Sustainable cost reduction and long-term competitiveness of both engineered products companies and suppliers are dependent upon an integration of traditional cost reduction philosophies in design and sourcing – a framework we call Integrated Cost Reduction (ICR).

ICR, comprised of Design Cost Optimization and Commercial Benchmarking modules, is a holistic approach involving RSC clients and their customers and suppliers.  By combining the best thinking from all stakeholders, the process successfully delivers mutually agreed-upon savings through the elimination of:

  • Over-designed or excessively complex components/systems
  • Uncompetitive elements in costs of supplied parts
  • “Joint” processes/services driving unnecessary value chain costs

Our range of cost reduction levers includes (but is not limited to):

  • Design benchmarking/teardowns and “should-cost” calculations
  • Design simplification, material substitution, part integration
  • Incumbent negotiations support, new/non-traditional supplier introduction
  • Low-cost country sourcing
  • Value-chain improvement, tier 2 sourcing 

Why choose Ricardo

Our consultants combine decades of experience in automotive and other manufacturing industries with extensive experience in operation improvement engagements with firms at all positions of the automotive and commercial vehicle value chains. The combination of deep technical expertise across numerous commodities and cross-functional business backgrounds uniquely positions Ricardo to deliver results in both Design Cost Optimization and Commercial Benchmarking. 

Having directly led over 100 supplier workshops and participated in over 500 negotiations, Ricardo is among the most experienced management consulting firms in this field.  Our greatest differentiator is however our unique access to hundreds of technical subject matter experts dispersed throughout the firm’s global offices that support Ricardo’s technical consulting business.  Cumulatively, these experts have knowledge of state-of-the-art design philosophies, should-costs, and ideal supply base for major commodities such as metal structures, forgings, casting, and complex sub-assemblies such as wiring, engine and transmission parts, electronics, etc.

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