Spirit AeroSystems [NYSE: SPR] designs and builds large aerostructures, including fuselages, pylons, nacelles and wing components, for both commercial and defense programs. Spirit is a leading aerostructures supplier to both Airbus and Boeing.
In early 2016, Spirit launched a strategic business initiative to identify a new technology partner they could work with to more effectively manage the ever present challenge of rising product cost. After evaluating the 3 core components of their Product Cost Management (PCM) system, they concluded that they would focus on the Design to Cost (DtC) segment. The rationale for this decision came from their discovery that:
…at least 75% of product cost is committed during conceptual and preliminary design activity
After an evaluation of all the leading PCM companies and technologies available on the market, Spirit selected aPriori Technologies, headquartered in Concord, Massachusetts, USA, to be their partner on the DtC project.
The Spirit AeroSystems methodology for evaluating and deploying aPriori to achieve fast Time-to-Value is a text book lesson in how to deploy an enterprise business strategy and technology platform into a complex, fast moving, global business.
Top 5 Best Practices for Implementing a DtC Strategy
In a recent conference presentation, Mr. David McGinley, Cost Engineering Manager at Spirit, identified 5 best practices that were discovered as part of their evaluation and deployment of the aPriori PCM technology:
• Select a Partner not a Vendor – For any strategic business initiative that will unfold and develop over multiple years, choose a technology partner that has deep subject matter expertise and a track record of delivering innovative solutions.
• Early Focus on Relative Accuracy – Spirit did not obsess over configuring their cost models to match a specific target dollar value. They focused on evaluating cost from the perspective of relative accuracy, seeking to know if a change in the product design increased or decreased the cost – and by what percentage.
• Prove Value Quickly – Spirit organized their deployment by configuring and rolling out cost models that had the strongest capabilities, met their internally established criteria for completeness, and had the highest likelihood of driving a fast Return on Investment.
• Invest in Training and Expert Services – Spirit invested in training for engineers and other related personnel to ground everyone in the basics of product cost management strategy and how to leverage the cost estimates being produced by the software.
• Track Value Consistently – Any investment in an enterprise business technology platform requires a significant commitment of company resources. If your intention is to dramatically improve your PCM process, it is imperative that you employ SMART metrics and refine the program based on quantitative data.
Early Trade Studies Yield 40-50% Cost Savings
In this short 2-minute video, Mr. McGinley talks about how a relatively straightforward trade study that looked at the costs of switching from machining plate stock to machining extrusions yielded significant savings for the team.
Want to Learn More?
If you would like to learn more about how aPriori Technologies could partner with your team to implement a Design-to-Cost strategy, we invite you to download the attached document which illustrates all the different elements of a commercial airplane that aPriori can help you cost using its advanced automated costing technology platform.