Full service supplier cost modelling

The major automotive manufactures are developing Full Service Suppliers (FSS), creating relationships, which fully utilise supplier expertise in product development. With this partnership the cost base is shifting towards the FSS, who recover this cost from their customers through prices of components supplied. FSS cost is becoming an increasing proportion of component pricing in the automotive industry, therefore a significant competitive advantage can be gained for the company that has this cost under control. The method of establishing the association between FSS cost and the cost driving component design attributes for specific commodities under development, extracted from case studies, is presented in the paper. This approach differs from the current practice of labour intensive cost simulation of every activity in the development process. This paper explains the rationale behind the cost model, which will forecast the FSS cost for a range of automotive components to an acceptable accuracy.