Everyone in cost and value engineering or project controlling knows about the current challenges. Governments and consumers scream for sustainable products, manufactured just around the corner, at low cost, and powered by batteries that cause the biggest environmental damage when digging the rare materials out of Mother Nature, to minimize the product's carbon footprint. It is fair to say, that the battery topic isn’t valid for all industries, but it is valid for the automotive and transportation industry which play a significant role in the global economy.
All this leads to the fact, that the complexity a cost and value engineer must handle has exploded due to the need to balance cost, carbon footprint, quality, time, and other environmental, social, and governance factors simultaneously.
Current Market Trends Affecting Cost and Value Engineering
Let’s talk about man-made or natural disasters and crises like wars, COVID-19, heavy rain, storms, and flooding, just to mention a few of them, that caused and will cause huge disruptions in the global supply chain and often lead to material and energy price fluctuations, delays or unavailability of critical components.
Together with consumer demand for customized products, it led to new sourcing strategies away from long contracts with one or few suppliers to short-term contracts with many suppliers to make the supply chain resilient to mitigate the impact of unforeseen events. You can imagine the struggles cost engineers might have to analyze and negotiate with more suppliers or customers more often.
And of course, no one in the manufacturing industry can pass the fear or uncertainty of sustainability and environmental regulations like the Carbon Border Adjustment Mechanism (CBAM) in the European Union or CO₂ taxes on products, which will lead to higher product costs when the companies cannot reduce the carbon footprint. These regulations are designed to reduce carbon emissions and promote sustainable practices in industries.
This requires cost and value engineers to have a deep understanding of sustainability practices and the ability to quantify the cost of carbon emissions and other environmental factors.
Enthusiasts would say, it is not only about reducing carbon footprint, but it is about achieving the goal of a circular economy, where products and their materials can be fully recycled to omit any kind of resource lost. Not to forget all the other environmental, social, and governance (ESG) impacts a cost and value engineer should consider along the way.
Don’t forget to talk about the ongoing digital transformation every company should go through to stay competitive by integrating advanced technologies in manufacturing and procurement to be able to handle all the aforementioned challenges. Digital tools and platforms are enabling cost and value engineers to automate many aspects of cost and carbon emission estimation, analysis, and reporting. This not only improves the accuracy of cost and carbon calculations but also allows for real-time data analysis, enabling faster and more informed decision-making.
Why Is It Now More Important Than Ever to Invest in an Automated Cost and Carbon Calculation Tool?
It isn’t!
It has always been and will be important to know the costs and carbon footprint of the products your company produces and purchases. Unfortunately, it is very unlikely that the next years have fewer crises than the last five years and cost factors will most likely stay volatile. Therefore, it is better to prepare now than later. It can help a lot to have your estimations and simulations run in a modern cloud-based software as a service (SaaS) application that can handle all the complexities by using advanced technologies.
Now You Ask Yourself, Why Tset?
Tset provides centralized and highly flexible data management with reliable data proof by customers and experts. This is combined with algorithm-powered calculation modules to estimate automatically more products and scenarios with enhanced accuracy and bottom-up granularity in less time. Tset is an enterprise SaaS solution, designed to seamlessly integrate with existing systems.
Tset is the answer to handle all the challenges a cost and value engineer faces today and tomorrow.
See Tset in Action
Watch our Injection Moulding Calculation Module video and see for yourself how the Tset Software works in real time!
