Cost Engineering Strategies for Industrial Sourcing

Sammanfattning: The art of estimating and managing costs is commonly referred to as cost engineering which is a vital tool to counteract cost uncertainty. Current research within the area mainly focuses on the cost estimation techniques themselves and the strategic implications have not yet been studied in-depth, nor been set into relation to traditional sourcing strategies. This study investigates how cost engineering should be used strategically within industrial sourcing. The research is conducted as a three-staged case study at a manufacturing company, including a qualitative part consisting of a literature review, interviews and analysis of artefacts, and a quantitative part consisting of a multiple regression analysis and a Welch-ANOVA test. The results from this study include a list of procurement attributes that a↵ect cost uncertainty and an assessment of their impact as well as insights on how cost engineering usage affect negotiation dynamics and supplier relationships. As a part of the study’s discussion, a strategic framework for cost engineering focus within industrial sourcing during the different phases of the product life cycle is presented. The proposed strategy involves insights on what cost engineering actions that have to be taken, which types of components the efforts should be focused on and what prerequisites that have to be present. The study shows that inter-organisation sharing of cost data, supplier relationships, changes in purchasing volume and product life cycle phase are of central importance when focusing cost engineering resources.