Analysis of cost estimating processes used within a concurrent engineering environment throughout a product life cycle

Concurrent engineering environments affect the cost estimating and engineering capability of an organisation. Cost estimating tools become outdated and need changing in order to reflect the new environment. This is essential, since cost estimating is the start of the cost management process and influences the ‘go’, ‘no go’ decisions concerning a new product development. This paper examines both traditional and more recent developments in order to highlight their advantages and limitations. The analysis includes parametric estimating, feature based costing, artificial intelligence, and cost management techniques. This study was deemed necessary because recent investigations carried out by Cranfield University highlighted that many concurrent engineering companies are not making efficient, wide spread use of existing estimating and cost management tools. In order to promote more efficient use of the discussed estimating processes within the twenty first century, this paper highlights the work of a leading European aerospace manufacturer and their efforts to develop a more seamless estimating environment. Furthermore, a matrix is developed that illustrates particular concurrent engineering environments to which each technique is aptly suited.