SPCEA recently ran a multiple-choice poll on LinkedIn asking a simple question:
“How are you MOSTLY using AI in your current role?”

One of the most valuable skills a cost engineer can develop is the ability to gather accurate information directly from the manufacturing floor. The true drivers of cost are often hidden within the details of the manufacturing process itself.

During a recent podcast interview I recorded for one of Italy's leading coaching programs, I had the opportunity to discuss a concept I explore deeply in my recent book, Authentically Yours: "Courage is a muscle."

As Women's History Month comes to a close, many organizations move on quickly, closing the chapter on panels, spotlights, and internal campaigns. In technical fields like cost engineering and analysis, the month can feel peripheral to the "real work": building estimates, managing uncertainty, defending assumptions under pressure.

In many organizations, the role of cost engineering is narrowly associated with supplier negotiations, purchase price analysis, and cost reduction workshops. While those responsibilities remain important, leading OEMs, especially within the automotive industry, have expanded the role significantly. Today, cost engineers are deeply involved in competitive benchmarking activities that help manufacturers understand where they stand in the marketplace, not only from a technical standpoint but also from a cost-competitiveness perspective.

In the aftermath of World War II, Ford Motor Company stood on the brink of collapse. Once the embodiment of industrial innovation under Henry Ford, the company had drifted into administrative chaos by the mid-1940s. Leadership instability, outdated practices, and a lack of financial discipline left Ford hemorrhaging money, losing tens of millions of dollars without having the accounting systems to understand why.

From design to calculation – why networked systems make all the difference to profitability

In product development, up to 80 percent of the subsequent costs are already determined in the design phase. Nevertheless, cost evaluation often takes place shortly before series production begins – too late to take countermeasures. The consequences are costly adjustments, additional costs, and decisions based on uncertain data.

As Women’s History Month comes to a close, many organizations move on quickly, closing the chapter on panels, spotlights, and internal campaigns. In technical fields like cost engineering and analysis, the month can feel peripheral to the “real work”: building estimates, managing uncertainty, defending assumptions under pressure.

Many cost engineers don’t start their careers on a factory floor. They start with spreadsheets, drawings, cycle times on paper, and assumptions that everything runs the way it is theoretically supposed to. In many cases, that works… right up until it doesn’t. That’s where OEE comes in.

It’s important to distinguish between measurements made from the financial accounting perspective and those made from the managerial accounting perspective. Periodicity is important in financial accounting. Expenses are measurements of the resources consumed during a specific period of time using measurable and auditable historical information in compliance with man-made rules and regulations. Managerial accounting, on the other hand, is more concerned with the long-term, sustainable economics of an organization. Expenses are measurements of the resources that need to be consumed for the organization to sustain its business over the long-term, whether or not those resources are consumed during a specific period of time.

In cost engineering - especially within the electronics industry, as in my own work - it’s easy to think that mastery lives in spreadsheets, cost models, and perfectly formatted should-cost reports. Those tools matter, but they aren’t where deep understanding is forged. The most effective cost engineers I’ve known pair strong analytical skills with real-world experience. My own most valuable insights didn’t come from a cost model; they came from hands-on work: touching parts, building circuits, breaking things, fixing them, and seeing firsthand how manufacturing and assembly actually behave when theory meets reality.

This month, I want to do something a little different—I want to talk about me for a change.

Cost engineering, a critical aspect of organizational efficiency, manifests itself differently across companies and industries. To delve deeper into this dynamic, SPCEA recently conducted a survey on LinkedIn, aiming to understand where exactly the cost engineering function resides within different organizational structures. The results and associated feedback shed light on some intriguing rationales:

An accountant, a financial analyst, and a cost estimator walk into a bar. They sit down on the stools at the counter.

Hey everyone! It’s Halloween week and I believe it is the perfect opportunity to talk about Leadership.

Artificial intelligence is already reshaping the cost engineering profession, and its impact in the workplace is undeniable.  Manual, repetitive, rule-based costing work is rapidly being automated. If your job consists of little more than generating should-cost estimates, then you are at risk because that part of the job is going away.

Becoming a cost engineer typically requires a combination of education, skills development, and practical experience. There are multiple ways to become a cost engineer but here is one step-by-step guide on how you could do it:

Knowledge is power, but how would you know whether more or new knowledge is needed? What if you were convinced that the knowledge you had was, in fact, the best and only knowledge you needed? Would you refuse to seek new knowledge and resist its merits? Based on human history, the answer is probably yes. As much as human civilization has advanced in the last several thousand years, change has always been resisted with fervor. From the advent of cars over horse buggies to the recent advent of AI, most people have always preferred to stay within their comfort zone of well-established social and technological structure. Costing has not been any different.

There is a certain innocence in numbers. Just like music, they can create a harmony that soothes the soul. Maybe that’s why some costing professionals don’t stress when performing their calculations. They put their numbers on the page, and they walk away. No harm, no foul. Their conscience is clear. Yet, numbers can cause great harm that can result in the pain and suffering of many people. How is this possible?

In earlier blogs, I explained my views about depreciation; both its irrelevance in business decision-making and the way it is treated as a fixed annual cost. An organization does, however, need to provide for the preservation of its existing capital based as it sells products and services to customers. One way to accomplish that is to develop a Capital Preservation Allowance. I first proposed this solution in an article titled “A Modest Proposal for Pricing Decisions” that appeared in the March 1993 issue of Management Accounting. This allowance is a long-term, forward-looking view of capital requirements that replaces depreciation in the calculation of product and process cost and enables a company to effectively accumulate the funding required from current products and services to preserve existing productive capabilities.