DFMA: SHOULD COSTING
DFMA: PRODUCT SIMPLIFICATION
What does DFMA mean for a cost engineer?
DFMA (Design for Manufacture & Assembly) gives cost engineers and procurement professionals a process-based costing engine — so you can build should-costs from first principles, not vendor quotes or spreadsheet estimates. The cost breakdown shows exactly what drives the number: material, setup, cycle time, tooling, secondary operations, and overhead.
The result: you negotiate from a transparent, defensible position. Suppliers see that you understand their cost structure. And when a quote doesn’t make sense, you can point to the specific driver — not just push back on the total.
- Should-costs from process physics, not vendor estimates
- Driver-level breakdowns that show where the money goes
- Supplier quotes vs should-cost: flag gaps by driver
- Global regions: same part, same process, 22 countries
- Supplier negotiations focus on specific cost drivers, not opinions
- Target cost alignment with engineering and procurement
On this page
Build should-costs from first principles
A vendor quote tells you what a supplier will charge. A DFMA should-cost tells you what the part should cost based on process physics — independent of any supplier’s margin, overhead allocation, or negotiation strategy.
You select a manufacturing process, specify basic geometry and features, and DFMA calculates the cost from the ground up: material consumption, machine cycle time, setup amortization, tooling, and secondary operations. Every number has a traceable logic path that you (or your supplier) can audit.
- Material cost (weight × price, including scrap)
- Machine time (cycle, setup, changeover)
- Labor (direct and indirect)
- Tooling (amortized over production volume)
- Secondary operations and finishing
- Overhead and margin assumptions
- Built from process models, not opinions or averages
- Every assumption is visible and auditable
- Based on current global data, updated regularly
- Independent of any single supplier’s pricing
Negotiate with transparent cost breakdowns
Pushing back on a supplier quote with “that’s too high” rarely moves the conversation. Showing the supplier a breakdown that says “your material cost is in line, but your setup assumption implies half the production rate we’d expect for this machine class” does.
DFMA cost breakdowns are structured to support fact-based negotiations. You can share the driver-level structure (material, cycle time, tooling) without revealing your total target — focusing the discussion on the specific areas where the quote diverges from what the manufacturing data supports.
- Wait for multiple vendor quotes
- Compare totals with limited visibility
- Push back on price, not drivers
- Depend on supplier’s cost structure
- Independent should-cost before quoting
- Compare quotes against process-based baseline
- Challenge specific drivers, not the total
- Transparent structure builds supplier trust
- 4–10% price improvement on purchased parts
- Faster negotiation cycles
- Stronger supplier relationships
- Consistent methodology across commodity teams
Compare global sourcing across 22 countries
DFMA’s Global Costing Data lets you run the same part through the same process model in different countries — and see how labor rates, material prices, energy costs, and machine economics shift the cost structure. It’s the same methodology everywhere, so the comparison is apples-to-apples.
This is especially valuable for make/buy decisions and sourcing strategy: instead of collecting quotes from suppliers in three countries and trying to normalize them, you model the part once and compare regions instantly.
- 22 countries across North America, Europe, and Asia
- 200,000+ data points updated regularly
- Regional labor rates by skill level
- Local material and energy pricing
- Machine hourly rates by equipment class
- Evaluate reshoring vs offshore scenarios
- Benchmark regional supplier quotes
- Model tariff and logistics impact on landed cost
- Support dual-sourcing strategy with cost data
Explore process alternatives independently
Typically, evaluating a different manufacturing method means getting new quotes from new vendors — vendors who may not quote realistically on an unfamiliar part, or who may underbid to win your business. The feedback loop is slow, expensive, and hard to trust.
DFMA lets you model alternatives yourself: compare injection molding vs die casting, stamping vs laser cutting, machining from bar stock vs forging. You see the cost breakdown for each route instantly, with no dependency on vendor timelines or motivations.
- Alternative processes for the same part geometry
- Material substitutions (with cost and property trade-offs)
- Volume breakpoints where one process becomes cheaper
- Make vs buy with internal vs external cost assumptions
- You don’t wait weeks for vendor quotes to compare routes
- Results are vendor-neutral — no bias from incumbent pricing
- You can recommend alternatives to engineering with data
- Helps suppliers reduce their costs by exploring options together
Example: finding the gap in a supplier quote
Same part. Should-cost vs supplier quote. One driver explains the gap.
A machined housing is quoted at $4.60 by the incumbent supplier. Your DFMA should-cost says $3.85. Material and tooling are in line — the gap is almost entirely in labor, where the supplier’s cycle time assumption implies a slower production rate than standard for this machine class and geometry.
- You share the driver-level comparison (not the total) with the supplier: “Our process model shows a cycle time of X for this feature set — your quote implies Y. Can you walk us through your setup?”
- The supplier explains they’re running on older equipment. You model the cost on their machine class to confirm — the gap narrows but doesn’t close.
- Together you identify a fixture change that would improve their cycle rate. The revised quote comes back at $4.05 — a win for both sides.
This is fact-based negotiation: you’re not squeezing margins, you’re identifying where the cost structure diverges from what the manufacturing data supports, and working with the supplier to close the gap.
Frequently asked questions
How is a DFMA should-cost different from a vendor quote?
A vendor quote tells you what a supplier will charge. A DFMA should-cost tells you what the part should cost based on process physics, material prices, and machine economics — independent of any supplier’s margin, overhead allocation, or negotiation strategy. It gives you a transparent baseline to evaluate whether a quote is competitive.
Do I need engineering drawings to build a should-cost?
Not for early-stage analysis. DFMA can produce useful should-costs from basic geometry, material intent, and production volume. As more detail becomes available, you can refine the estimate. This means you can start costing alternatives before detailed design is complete.
What data does DFMA use for global costing?
DFMA includes over 200,000 data points across 22 countries — covering labor rates, material prices, energy costs, and machine hourly rates. This Global Costing Data is updated regularly and lets you compare sourcing scenarios across regions with the same process model and methodology.
Can I use DFMA results directly in supplier negotiations?
Yes. DFMA produces detailed cost breakdowns showing material, labor, tooling, overhead, and profit assumptions. Many sourcing teams share the breakdown structure (not the total) with suppliers to focus negotiations on specific cost drivers rather than the headline number.
How does DFMA help with make/buy decisions?
DFMA lets you model the same part across different manufacturing processes, materials, and regions — without depending on vendor quotes or internal estimates that may carry legacy assumptions. You can compare in-house vs outsourced scenarios with consistent methodology and transparent cost drivers.
How quickly can a cost engineer build a should-cost in DFMA?
A typical part analysis takes 15–45 minutes depending on complexity. Dynamic Cost Agent can reduce this further by automatically surfacing only the high-impact input questions. For experienced users, a portfolio of parts can be costed in a fraction of the time it takes to collect and evaluate vendor quotes.
Bring a part you’re negotiating on right now
We’ll build a should-cost together — show you the driver-level breakdown, compare it against a supplier quote, and demonstrate how DFMA changes the negotiation dynamic.
