About
The Society's Vision & Mission
The Society of Cost Engineers, LLC is a professional organization for Cost Engineers. The Society has been designed to promote and assist the discipline of Cost Engineering through standardization, education, and certification. The Society of Cost Engineers, LLC is intended to be a member-driven organization. The membership has the ability to help define the course of the organization through the open exchange with the leadership via the forums, comments, and contact us links.
The Society of Cost Engineers, LLC attempts to promote both individuals and the Cost Engineering discipline by posting resumes as well as job openings.
The Society of Cost Engineers, LLC, while being unbiased, will continue to work with industry leads to ensure that it stays relevant, up to date, and able to identify the best costing tools available in the market or self-made to make it possible to identify what is the best solution for each enterprise. We will continue to work with these leaders to provide benefits to our members in the form of discounts, training, expert advice examples, etc.
The GOAL of the Society of Cost Engineers, LLC is to standardize cost engineering terms, procedures, and certification and to deploy the cost transparency culture around the world.
What is Should Costing?
Should Costing is the practice of determining the "SHOULD COST" of a product, component, or service prior to issuing a Request for Quote. Should Costing is similar and relies on some of the same principles of the typical Cost Estimating, but is entirely different.
Should Costing is an attempt to predict the cost/price of your supplier based on Best-in-class processes. Once you have this established, you then use Fact-Based Negotiations for your purchased components, assemblies, or services.
Cost Cafe
The Cost Café is now open!
Grab a drink, take a 15-minute break (or maybe an hour), relax, and join us at the Cost Café. We are starting a new series for cost professionals everywhere. Discussing, debating, and enjoying all things cost engineering. For updates, become a free member on the Society of Cost Engineers website, and follow the Society of Cost Engineers on LinkedIn for updates.
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Episode 21
Embracing The Opportunities of AI in Cost Estimation
GalorathEmbracing The Opportunities of AI in Cost Estimation
Join Galorath and The Society of Cost Engineers for an exclusive webinar that will transform your thinking about cost estimation. With the expertise of Fritz Wüthrich, a renowned thought leader in the Digital and IT space, this session is your gateway to mastering AI in cost estimation.
Episode 20
In this episode, Dan Kennedy from Galorath will discuss the different types of Cost Models and their importance.
Society of Cost Engineers Sponsor Series Galorath Edition – YouTube
Episode 19
In this episode, Unison presents its solution for Cost Engineering.
Blog
Solving the 1st Half of the Problem to get to the 2ndÂ
A problem well stated is a problem half-solved.— Charles F. KetteringÂ
A few months ago, I wrote about the ill-fated AGM-183A hypersonic missile. While its engineering parameters were well-known, its budget limitations were not. Funded to about $1.7B for its development, Lockheed Martin said its first unit cost would be about $42M. At the same time, the Congressional Budget Office thought the USG would be able to afford 100 of them at their eventual per-unit price of $15M to $18M. As a variation of the chart below revealed (C), the chance of that happening was significantly less than one in one million quadrillion, as that price put it at 108 Standard Deviations past the market's Upper Demand Frontier. Eventually, budget realism entered the picture, and the United States Air Force stopped funding the program. In the process, it validated their Demand Frontier.Â
For all the work we spend extending the boundaries of engineering, we must understand that trying to exceed a well-defined Demand Frontier by leaps and bounds never works. Â
To know what we can do, we must first know what we can't. That's part of the 1st half of the problem. The AGM-183A didn't get past that. Â
LM did quite a bit better with its stealthy AGM-158B, also known as the JASSM-ER, in (A) below. At the time of the study, it was the most expensive air-to-surface missile in the industry. In the 20 years shown in (C) (1997-2016), LM sold 275 units at an inflation-adjusted 2024 price of $2.5M, with the AGM-158B helping to form the market's Upper Demand Frontier. Note that that curve is relatively flat, with a slope of -0.533. That meant the USG spent more money on the market's lower-priced part than its upper bit.Â
A recent headline noted that Russia knocked down over 150 Ukrainian drones. The ineffectiveness indicates the need for missiles to be invisible to the enemy. Getting smaller and stealthier will help. Â
Enter the prospect of much smaller, less expensive, and (presumably stealthy) cruise missiles, the air-to-surface (specifically, anti-ship) ordnance proposed by American defense startup Ares Industries shown in (B). Designed to attack smaller vessels, the company has set a target price of $300K per missile. Of course, whether or not they pull this off remains to be seen, but the attempt is admirable, as the low price enables the purchase of up to tens of thousands of units over two decades (C). It would add flexibility in the inventory, letting operators swap expensive devices for cheaper ones when smaller packages can do the job.Â
In (C), since Glide Bombs cost a fraction (about 1/8 for the same payload*velocity and range) of missiles, planners can afford to buy more of these devices than powered missiles. One could imagine a future in which stealthy glide bombs dropped from unmanned drones would lower operational costs and pilot risk while increasing mission success rates.Â
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