Morgan, tell a little bit of your self?
I’m 57 years old, lives in Jönköping together with my wife Ingela to whom I have been married for 24 years. We have three children, all lives in Gothenburg. We also have one grandson, so we spend much time in Gothenburg.
I started to work at a company that was called Scandmec 1985, later acquired by Kongsberg Automotive. I have had many different positions at Kongsberg Automotive, operator, production engineer, production manager, business area manager, project manager, category buyer and now the latest 10 years have I worked as Cost Engineer.
Now after 39 years will I stop working for Kongsberg Automotive and focus on consultancy within cost engineering, purchasing and production. Beside my employment at Kongsberg Automotive have I had my own company, M. Lundberg Consulting AB, since beginning of 2021.
You worked with Cost Engineering for many years. What is Cost Engineering?
Cost Engineering is about estimating, managing, and optimizing product and project costs over lifetime. I.e. support engineering in early concept phase, support with design to cost, set target prices, make or buy decisions, verify suppliers quotes before nomination, fact-based negotiations, verify impact of cost fluctuations (energy, raw material, labor cost etc..) etc. etc.. Cost Engineering and detailed cost calculations gives the company full cost control from concept to end of lifetime of the project.
What advice would you give companies who want to apply Cost Engineering?
First of all, I think it’s important where in your organization you put Cost Engineering. In some companies it’s organized under engineering and in other companies under purchasing. That in some way set the focus for your cost engineering. The experience I have is with cost engineering organized under purchasing and most focus have then been on purchased parts. I actually started cost engineering in combination with my category buyer role.
We started with current serial products and challenged suppliers with should cost calculations and fact-based negotiations. This was a very good start that generated significant cost savings. It’s both about verifying that you pay the right price for the product and, maybe most important, to discuss and propose process improvements. A Cost Engineer that has good knowledge about production processes have important input to product and process improvements in Lean initiatives and VA/VE projects.
Then, of course, it’s important that cost engineering is involved early in design phase to support with design to cost and process selections.
Since lead times in RFQ phases for new projects tends to be shorter and shorter it’s a strength to have Cost Engineering to support with cost calculations that can be used for initial quotes to customer.
It’s possible to make cost calculations in excel sheets but I strongly advise to invest in a software, there are several different providers for cost calculation software’s.
