How One Buyer Used Should-Cost Modeling to Negotiate a 12 Percent Price Cut

In this episode of The Buyer's Side, Lucas and Luna dive into the story of a procurement director at a mid-sized medical device manufacturer who used should-cost modeling to negotiate a 12 percent price reduction on precision-machined components. They walk through how the buyer built a bottom-up cost model by analyzing raw material costs, labor rates, machine time, and overhead, then used that data to challenge a long-standing supplier's pricing. The episode covers the specific techniques involved: disassembling the supplier's quote line by line, benchmarking labor rates against regional data, and presenting the model in a collaborative rather than adversarial way. Lucas explains why should-cost modeling is particularly effective in opaque markets where competitive bids are hard to obtain, and Luna raises the practical challenges of getting internal engineering teams to share detailed specifications. The conversation explores how this buyer maintained the relationship while cutting costs, and offers listeners a concrete framework for applying should-cost analysis to their own categories. #ShouldCostModeling #Procurement #Negotiation #CostReduction #SupplyChain #B2B #Purchasing #MedicalDevice #Manufacturing #CostAnalysis #SupplierManagement #SpendManagement #Business #FexingoBusiness #BusinessPodcast #TheBuyersSide #StrategicSourcing #CostTransparency Keep every episode free: buymeacoffee.com/fexingo