costengineering_skill

Overview

This skill provides manufacturing cost accounting, analysis, and cost-reduction guidance focused on automotive operations. It covers overhead and burden rate calculation, variance analysis, make-vs-buy decisions, value engineering, and converting cycle time to cost. Use it to produce standard cost builds, investigate variances, and drive targeted savings.

How this skill works

I inspect cost inputs (material, labour, machine hours, overhead pools) and apply standard formulas to produce product cost sheets, overhead rates, machine-hour rates, and burdened labour rates. I run variance breakdowns against standards, model make-vs-buy comparisons using relevant fixed and variable costs, and generate value-engineering options with expected savings. Outputs include actionable recommendations, thresholds for investigation, and templates for cost sheets and comparisons.

When to use it

• You need an overhead or burden rate calculated for quoting or product costing
• You want to investigate material, labour, or overhead variances
• You need a make-vs-buy decision with quantified cost comparisons
• You are running value engineering or target-costing workshops
• You want to convert cycle time or machine hours into product conversion cost

Best practices

• Use predetermined overhead based on realistic activity estimates and review monthly for under/over absorption
• Maintain clear standards for material yield, labour times, and machine rates and update after validated investigations
• Set investigation thresholds (e.g., 5% or monetary limits) to focus root-cause work
• Include avoidable fixed costs and logistics/quality costs in make-vs-buy to capture total relevant cost
• Apply FAST value-engineering questions before proposing substitutes to preserve function and quality

Example use cases

• Build a standard cost sheet for a new part: material, conversion by operation, overhead absorption, and margin comparison
• Investigate a month where labour efficiency is 85%: identify top variance drivers, recommend corrective actions, update standards if needed
• Compare making vs buying a subassembly: compute variable cost, allocated avoidable fixed cost, supplier landed price and recommend action
• Run a value-engineering session to reduce part cost by simplifying features, substituting materials, or combining operations with estimated savings
• Calculate machine-hour and combined rates for quoting and cycle-time cost modeling