Released on = April 14, 2006, 4:58 am

Press Release Author = John Busa

Industry = Software

Press Release Summary = aPriori Examines How Discrete Manufacturers Look at Product
Costs

Press Release Body = Discrete manufacturers have been forced to take a "rear view"
look at product costs, such as evaluating and allocating product costs well after
production was underway.

Cost information in most organizations is fragmented throughout the enterprise.
Critical pieces of cost information are spread across independent silos within an
organization in different functions like engineering, planning, manufacturing,
sourcing, finance, etc. This situation typically results in estimates that do not
include all relevant information required to make accurate and predictive product
cost assessments. In most organizations product cost estimates are developed by
specialized organizations in cost engineering or VA/VE departments. In most cases,
these cost estimates are created separately and independently of the people making
the design, manufacturing, and sourcing decisions. This separation results in many
decisions being made in a cost knowledge vacuum. The impact of these decisions is
typically not known for at least a full financial period after production is well
underway.

According to Frank Azzolino, President & CEO of aPriori, the Massachusetts based
Cost Management Platform company, "Product cost estimates (especially early ones)
are often based on historical information or very general heuristics (e.g. weight)
and are too inaccurate and lack statistical confidence for effective decision
making. Most cost estimating activity falls on a relatively small group of
specialized people spending hours manually producing each estimate. Since the
demand for costing feedback cannot always be met, the opportunity to experiment with
the cost impact of design, manufacturing, planning, sourcing, etc. alternatives is
limited and can not be readily cost optimized."

Most cost estimates are static and are not continually updated when new design,
manufacturing, planning, or sourcing information becomes available as the product
progresses through its design-to-production-to-delivery lifecycle. Out-of-date cost
information can not be relied upon for downstream decision making. Costing
practices are not always standardized across the enterprise. As more information is
available, different costing practices and methods are used to re-cost items.
Unfortunately this makes it difficult to leverage previous estimating work and build
traceability in product cost accrual.

Typically cost estimates are not managed through a product's development through
production lifecycle. Multiple cost estimates from different sources are created as
different times during the process. It becomes unclear which product cost estimate
is current or valid. Today's cost accounting methodologies begin with the financial
statement for the prior closed financial period. The costs in that period are then
allocated across various product lines and processes which are then further
allocated for each individual product. These are by definition "rear view" mirror
product costs.

aPriori's Cost Management Software Platform enables manufacturers to better
understand product cost decisions early and throughout the product lifecycle.
aPriori's Cost Management Platform empowers manufacturers to lower cost-of-goods
sold (COGS), provides real-time visibility to "cost-critical" decision information,
and builds critical cost knowledge to go on the business "offensive." aPriori's
patent-protected cost management platform allows companies to assess, control, and
reduce cost of goods sold by whole percentages. The aPriori Platform enables "Cost
Knowledge Before it Matters."






Web Site = http://www.apriori.com

Contact Details = John Busa
aPriori
www.aPriori.com
978-371-2006
jbusa@apriori.com