Turn Cost Pressure into Product Advantage
Rising material prices, fragmented supplier networks and increasing product complexity are putting margins under pressure. Yet many organizations still lack a clear view of what products should cost, where value is being lost or which opportunities can be implemented.
HCLTech’s Cost Engineering connects product engineering, cost engineering, value analysis and value engineering and supply chain management in one outcome-led approach. We begin with the business goal. This could mean reducing the cost of goods sold, improving product margin, simplifying a portfolio, challenging supplier prices or strengthening supply resilience. We then configure the right mix of engineering, cost and sourcing levers to achieve it.
Our 3R approach
- Re-engineer the product
When design complexity, excess material or inefficient manufacturing drives cost, we optimize function, architecture, materials, weight and processes while protecting quality, reliability and compliance. - Re-negotiate the cost
When supplier prices lack transparency, we create should-cost models, clean-sheet analyses, benchmarks and fact packs that give procurement teams a stronger basis for negotiation. - Re-source the supply
When single-source dependency, geographic risk or supplier fragmentation limits resilience, we identify alternate suppliers, qualify new sources and rationalize supply portfolios.
From opportunity identification to engineering change, supplier negotiation and implementation, we help clients move beyond estimated savings to measurable value.
Certified value engineers
Cost, value and supply chain engineers
Commodities supported
Countries represented in our global cost database
Square feet of teardown infrastructure
Domain-specific labs
Spend analyses in the last three years
Delivered in realized savings
Close the Gap Between Opportunity and Realized Savings
Many cost programs identify opportunities. Fewer convert them into approved design changes, revised supplier prices or measurable product savings. We connect analysis with implementation.
Start with the business outcome
Define the cost, margin, complexity or resilience target before selecting the services. This keeps every workstream focused on measurable value.
Configure the right cost levers
Combine should-costing, teardown, value engineering, spend analytics, sourcing, supplier negotiation and SKU rationalization based on the client’s product and cost environment.
Connect engineering and procurement
Bring together product R&D, manufacturing, quality, regulatory, procurement and supply chain teams around one cost objective and one implementation roadmap.
Validate before changing
Assess technical feasibility, function, quality, risk, regulatory impact, investment and ROI before progressing an idea.
Support implementation
Move approved ideas through detailed design, prototyping, testing, supplier qualification, sourcing events, negotiation and production release.
Align fees with value
Fixed-fee, performance-based or hybrid commercial models. Where appropriate, part of our fee can be linked to approved or realized savings.
Apply the Right Lever to Every Cost Challenge
Our Cost Engineering portfolio supports new products, mature portfolios, procurement categories and aftermarket operations. The wider portfolio includes spend analytics, category workbooks, RFx management, packaging optimization, supplier-quality assessment, component-shortage support and sustainable sourcing.
- Re-engineer
- Re-negotiate
- Re-source
Re-engineer
Value analysis and value engineering
Challenge: Products contain excess material, unnecessary complexity or features that add cost without enough client value.
Our response: Analyze product function, specifications, design and cost to identify opportunities for material substitution, weight reduction, miniaturization, part standardization and process-improvement.
Design-to-cost and design-to-value
Challenge: Cost targets enter the conversation after the design is already fixed.
Our response: Define the target cost early and evaluate design, material, process and sourcing decisions before avoidable cost becomes embedded.
Teardown and competitive benchmarking
Challenge: Teams lack visibility into how competing products achieve different levels of cost, quality or performance.
Our response: Disassemble and compare products across features, functions, materials, manufacturing methods, quality, serviceability and estimated cost.
Reverse engineering and redesign
Challenge: Product definitions are incomplete, obsolete or unsuitable for localization and technology migration.
Our response: Reconstruct product data, CAD models and documentation, then redesign for cost, reliability, localization or lifecycle extension.
Re-negotiate
Should-costing and clean-sheet modeling
Challenge: Supplier quotes cannot be challenged because the underlying cost drivers are unclear.
Our response: Model material, labor, machine, setup, tooling, cycle time, volume, overhead, logistics and geographic cost.
Supplier negotiation support
Challenge: Procurement teams have price history but limited engineering evidence.
Our response: Compare quoted price, current price and the should cost, then create fact packs, negotiation packages and supplier-specific cost models.
Price audit and cost monitoring
Challenge: Market volatility and contract complexity make it difficult to determine whether price changes are justified.
Our response: Track commodity economics, contractual terms, cost indices and comparable part prices to improve pricing discipline.
Re-source
Strategic and alternate sourcing
Challenge: Single-source dependency, regional risk and capacity constraints threaten continuity.
Our response: Assess make-or-buy decisions, explore alternate suppliers, identify low-cost regions and explore localization and dual-sourcing opportunities.
Supplier and tail-spend optimization
Challenge: A fragmented supplier base reduces leverage and increases procurement effort.
Our response: Segment suppliers, consolidate low-value spend, rationalize categories and improve sourcing scale.
SKU and portfolio rationalization
Challenge: Duplicate parts and unnecessary variants increase inventory, sourcing complexity and working capital.
Our response: Analyze spend, specifications, product commonality and lifecycle stage to identify standardization and consolidation opportunities.
Source-change implementation
Challenge: Alternate suppliers are identified but qualification and implementation stall.
Our response: Support supplier development, component qualification, first-article inspection, production-part approval and purchase-order change.
Accelerate Cost Engineering with Cost-Based Actionable Intelligence
Our digital platforms, global cost data, teardown infrastructure and proven frameworks help teams model complex cost drivers, compare scenarios and act on opportunities faster.
Product should-cost calculator
A secure, cloud-based platform to calculate detailed product should-cost, simulate manufacturing processes and compare design, supplier, plant and geographic scenarios.
Product carbon footprint calculator
Generate detailed product carbon footprint estimates, assess value chain emissions and compare cost and carbon outcomes across materials, energy, transport and manufacturing processes. The solution identifies product decisions that can reduce both commercial cost and CO2e impact.
3x3x3 opportunity assessment
Begin with a focused assessment that quickly moves from a broad cost challenge to a practical execution path.
Teardown and reverse engineering labs
More than 100,000 square feet of teardown infrastructure and 22 domain-specific labs across automotive, industrial, consumer and medical-product environments.
Costing tools, playbooks and frameworks
Combine HCLTech-owned macros, web applications, mobile applications with established tools such as commercial platforms, Teamcenter Product Cost Management and Costimator. Apply standardized and client-specific cost models, VAVE frameworks, sourcing playbooks, maturity models and implementation methods based on the engagement.
Product should-cost calculator
This product cost management platform supports:
- Automated Bill-Of-Material (BOM) import from PLM systems
- BOM extraction from engineering drawings
- Material, labor, machine and manufacturing-process costing
- Supplier and plant-specific rate calculations
- Manufacturing cycle-time simulation
- Product landed-cost analysis and benchmarking
- Alternate material, process and sourcing scenarios
- Real-time dashboards, collaboration and version control
- Cost and carbon trade-off analysis
HCLTech global cost database
Build cost models using structured intelligence across:
- 50+ countries
- 200+ raw materials
- Five labor types
- 1,500+ machine data points
- Macroeconomic and regional cost factors
- Globally accepted data sources
- Quarterly data updates
- Historical cost charts
3x3x3 opportunity assessment
- Select three priority areas or categories
- Run a three-day requirements and data workshop
- Receive the opportunity analysis and recommended approach within three weeks
Potential areas include spend analysis, SKU rationalization, should-costing, supplier auctions and sourcing strategy.
Teardown and reverse engineering labs
Capabilities include:
- Systematic product disassembly
- Zeiss 3D scanning
- Geomagic reconstruction
- Material analysis and characterization
- Dimensional measurement
- CAD model creation
- Additive-manufactured prototypes
- Teardown and ideation workshops
Case Studies
Innovative product development redefines coffee roasting, offering unparalleled control and quality to users
Developing a scalable, modular and secure VCU architecture for LEVs for a British electric drivetrain specialist
HCLTech helped a global energy leader optimize IT support across 40+ sites, reducing costs, improving performance and enhancing operational efficiency through a comprehensive digital manufacturing so
HCLTech helped the client’s development team build a proprietary application deployment platform that enabled them to develop data-driven applications more productively.
HCLTech helped a global print OEM automate testing and optimize workflows, saving over $2M in R&D costs, improving scalability, and reducing maintenance and consumables expenses for greater efficiency
HCLTech helped the client achieve their long-term financial strategies, operational needs and environmental commitments through our Hybrid Cloud as-a-Service, powered by Dell Technologies.
Turn Product Cost Insight into Action
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Your Cost Challenge Is the Starting Point
Bring us one product, supplier category or savings target. We will identify the right levers, build the business case and help convert the opportunity into realized value.
Find what inspires and drives you
Frequently Asked Questions about Cost Engineering
HCLTech’s Cost Engineering combines value engineering, value analysis and supply chain management to improve product economics from design through sourcing and implementation.
- Re-engineer the product, material or process
- Re-negotiate cost using the should-cost evidence
- Re-source through alternate suppliers, locations or supply strategies
Yes. We support target costing, design to cost and design to value for new products. We also provide teardown, should costing, value engineering, sourcing and portfolio optimization for existing products.
Engagements can use fixed-fee, performance-based or hybrid models. Outcome-based models can link part of the fee to approved or realized savings, subject to agreed terms.
Yes. The framework remains consistent, but the product, manufacturing, material, regulatory and qualification requirements change by industry.
It addresses rising material and supplier costs, limited cost transparency, product complexity, fragmented supply networks, SKU proliferation, margin pressure and the gap between identified and realized savings.
Procurement cost reduction focuses mainly on supplier price and commercial terms. Cost Engineering also examines product function, design, material, manufacturing, tooling and production geography.
We support portfolio selection, cost analysis, engineering validation, business-case approval, supplier negotiation, redesign, testing, qualification and implementation.
It calculates should-cost, simulates manufacturing processes, compares supplier and geographic scenarios and evaluates landed cost and cost-and-carbon trade-offs.
Start with one product, supplier category or business goal. HCLTech can also use the 3x3x3 assessment to evaluate three areas through a three-day workshop and recommend an approach within three weeks.