Should Cost for OEMs and Procurement Teams
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Should Cost Estimating Software for OEMs and Procurement Teams - Costimator®
Should cost estimating is one of the most powerful tools available to procurement teams, OEMs, and engineering firms that source manufactured parts from outside suppliers. Costimator® by MTI Systems gives buyers the ability to independently calculate what a machined, fabricated, or molded part should cost to produce — before soliciting quotes, before entering negotiations, and without relying on what suppliers choose to submit.
Built on over 40 years of industry-validated manufacturing data, Costimator® contains thousands of process cost models and time standards that reflect real-world production conditions across machining, sheet metal fabrication, welding, and other manufacturing processes. Its speed and feed library covers over 2,000 material grades, ensuring that should cost estimates are grounded in the actual parameters a supplier's shop would use to produce the part.
Costimator® has been used by nearly 2,000 manufacturing organizations worldwide since 1982 — including OEMs, contract manufacturers, procurement departments, and engineering firms across North America, Europe, and Latin America.
Should Cost Estimating
OEMs and Procurement
Manufacturers using Costimator® report the following improvements:
40+
Years
Experience
- 78% increase in estimating speed
- 89% improvement in costing accuracy
- 61% reduction in time spent on estimates
- 69% improvement in quoting accuracy
Results based on customer surveys across machine shops and sheet metal fabricators.
78%
increase in estimating speed
89%
improvement in costing accuracy
61%
reduction in time spent on estimates
69%
improvement in quoting accuracy
Calculate Success
What is Should Cost Estimating?
Should cost estimating is the process of calculating what a part or assembly should cost a supplier to manufacture — based on materials, labor, machine cycle time, setup, overhead, and reasonable profit margin — independently of any quote the supplier provides.
The purpose is to give the buying organization a defensible, data-driven cost figure they can use to:
- Benchmark supplier quotes — identify whether a quote is fair, high, or significantly overpriced relative to actual manufacturing costs
- Guide negotiations — enter supplier discussions with a credible independent cost figure rather than accepting the first number submitted
- Identify savings opportunities — uncover where supplier costs can be reduced through process changes, material substitutions, or consolidation
- Validate new supplier quotes — assess an unfamiliar supplier's pricing before committing to a sourcing relationship
- Support design-for-cost decisions — estimate the manufacturing cost impact of design changes before they reach the supply chain
Historically, should costing was a slow, manual process — relying on the memory of experienced engineers, rough analogies to past parts, or informal guesswork. Costimator® replaces that approach with a structured, repeatable, data-driven methodology that any estimator or procurement analyst can apply consistently.
Professional Estimators
Should Cost Estimating vs. Strategic Sourcing
Should cost estimating and strategic sourcing are complementary approaches to managing supplier costs, but they work differently.
Strategic sourcing involves soliciting quotes from multiple suppliers — typically at least three — and making sourcing decisions by comparing what each supplier submits. The buyer's negotiating position is limited to the spread between those quotes.
Should cost estimating goes further. Before any quote is requested, the buying organization calculates an independent cost estimate for the part based on how it would actually be manufactured. When supplier quotes arrive, the buyer already has a data-driven answer to the question: "What should this part cost?" This shifts the negotiating dynamic entirely — the buyer is no longer relying on suppliers to define the cost range.
Costimator® supports both approaches. It can be used as a standalone should cost tool before going to market, as a validation layer on top of received quotes, or as an ongoing cost management resource throughout the life of a sourced component.
These manufacturers learned the secret of cost estimating!
Manufacturers
Who Uses Costimator® for Should Cost Analysis
OEMs and Product Manufacturers
Original equipment manufacturers use Costimator® to calculate should cost estimates for components sourced from their supply chain — giving procurement and engineering teams a cost target to negotiate toward and a basis for identifying overpriced parts across a multi-supplier supply base.
Procurement and Supply Chain Teams
Procurement teams use Costimator® as an ongoing cost management tool — validating new quotes, benchmarking existing supplier pricing at contract renewal, and identifying components where cost reduction initiatives are most likely to yield savings.
Engineering Firms
Engineering firms performing cost analysis on behalf of OEM clients use Costimator® to rapidly generate should cost estimates for parts and assemblies under review, supporting design-for-cost analysis and supplier selection decisions.
Contract Manufacturers
Contract manufacturers use Costimator® for both outbound quoting and inward should cost analysis — verifying that their own supplier quotes for raw materials, subcontracted operations, and bought-in components are in line with what those items should cost."The two main uses we have for Costimator® are should cost and quoting. Since we have taken on Costimator® we've doubled the size of our company. Being accurate on our quoting and getting them out the door right away is what helped us land that business."
— Aaron Harrison, Manager of Product Estimating
"We now use this should cost estimating software to estimate and quote the costs of our service parts and compare them to the quotes we get from our suppliers."
— Luis Gerardo Carmona Cruz, Central Negotiations
"Contract bidding and the art of fast and accurate cost estimating are more crucial to a company's profitability now than ever before. We rely heavily on our Costimator® to produce accurate bids for competing effectively."
— Chris Lobdell, President
Frequently Asked Questions
Frequently Asked questions about Should Cost Estimating
Get the answers to questions of how Costimator will help your company save time, money and win new bids.
What is should cost estimating?
Should cost estimating is the process of independently calculating what a part or assembly should cost to manufacture — based on materials, labor, machine time, overhead, and profit — before receiving or negotiating supplier quotes. It is used by OEMs, procurement teams, and engineering firms to establish a defensible cost baseline for supplier benchmarking and negotiation.
Who uses should cost estimating software?
Should cost estimating is primarily used by OEMs, procurement and supply chain teams, and engineering firms that source machined, fabricated, or molded parts from outside suppliers. It is also used by contract manufacturers to validate their own pricing and identify cost reduction opportunities.
How does Costimator® support should cost analysis?
Costimator® enables users to calculate an independent should cost estimate for machined, fabricated, and molded parts using the same industry-validated cost models and manufacturing time standards used by actual production shops. The software contains thousands of process cost models and a speed and feed library with over 2,000 material grades, all developed and validated over more than 40 years.
What is the difference between should cost estimating and strategic sourcing?
Strategic sourcing compares quotes from multiple suppliers. Should cost estimating calculates an independent cost figure before quotes are solicited — giving the buyer a benchmark not dependent on supplier submissions. The two approaches can be used together or independently.
What types of parts can Costimator® should cost?
Costimator® supports should cost analysis for machined parts, sheet metal fabricated parts, welded assemblies, molded parts, and mixed-process assemblies — covering milling, turning, drilling, laser cutting, punching, bending, welding, and more.
How accurate is Costimator® for should cost analysis?
Costimator® is built on over 40 years of manufacturing data validated by nearly 2,000 manufacturing organizations worldwide. Its cost models and time standards reflect real-world production conditions — machine speeds and feeds, tool change times, setup times, material properties, and overhead structures — making it a reliable basis for supplier cost benchmarking and negotiation.
Free Demo & Consultation
Ready to negotiate supplier quotes from a position of knowledge?
Whether you are benchmarking a new supplier, reviewing existing part costs, or building a design-for-cost analysis — Costimator® gives your team the validated manufacturing data needed to calculate a credible should cost figure for any machined or fabricated part. Request a free demo to see it applied to your own components.
Location
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