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Solar Turbines Uses aPriori Manufacturing Cost Models to Facilitate Fact-Based Supplier Negotiation
Technology Category
- Analytics & Modeling - Predictive Analytics
- Application Infrastructure & Middleware - Data Exchange & Integration
- Functional Applications - Manufacturing Execution Systems (MES)
Applicable Industries
- Equipment & Machinery
Applicable Functions
- Procurement
- Quality Assurance
Use Cases
- Predictive Maintenance
Services
- Data Science Services
- System Integration
The Challenge
Solar Turbines’ costing team fields cost modeling requests from anywhere across the company’s global supply chain. This task includes storing and organizing all the data inputs and parameters necessary to creating, validating, and completing manufacturing cost models in the most efficient manner possible. Solar Turbines’ cost team needed a tool to generate robust manufacturing cost models and power a strategic move to fact-based supplier negotiations. They selected aPriori as a tool that could not only use digital manufacturing simulation to model product costs but provide the data management tools necessary to create an organizational repository for tracking and validating key cost data.
About The Customer
Solar Turbines, a subsidiary of Caterpillar Inc., is a leading manufacturer of industrial gas turbines and related products. The company serves a diverse range of industries, including oil and gas, power generation, and marine propulsion. With a global presence, Solar Turbines is committed to delivering high-quality, reliable, and efficient energy solutions. The company’s extensive product portfolio includes gas turbine engines, gas compressors, and gas turbine-powered compressor sets, mechanical-drive packages, and generator sets. Solar Turbines is known for its innovative approach to engineering and manufacturing, leveraging advanced technologies to meet the evolving needs of its customers. The company’s commitment to sustainability and operational excellence is evident in its continuous efforts to improve product performance and reduce environmental impact.
The Solution
Solar Turbines uses aPriori to record key inputs and outputs throughout the cost modeling process. Iterative validation ensures that both model inputs and final manufacturing cost models accord with the understanding of the associated technical engineer. This careful validation process helps keep inputs and modeling parameters consistent with the ground-level reality of how a product is manufactured (and, crucially, how it could be optimally manufactured). Unknown cost variables are also carefully documented for discussion with suppliers to help understand their effect on the final price. This process gives Solar Turbines confidence to use their outputs as the basis for fact-based negotiation with suppliers. With a robust, validated manufacturing cost model in hand, they have the ability to frame supplier negotiations around eliminating waste, not pushing down a supplier’s profit margin. Solar Turbines uses aPriori to generate manufacturing cost models for both optimal manufacturing routings (reflecting the cost at which a product can be made regardless of supplier capabilities) and supplier-specific costs (reflecting Solar Turbines’ best understanding of a specific supplier’s routing capabilities). These outputs help inform different types of analyses. If selecting a new supplier, Solar Turbines has the capability to compare quoted prices to the cost for an optimal routing. In cases where the company is happy with an existing supplier, supplier-specific manufacturing cost models can be used to negotiate the best possible price given a supplier’s existing capabilities.
Operational Impact
Quantitative Benefit
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