The report discusses the importance of cost breakdown analysis (CBA) for reducing costs in the face of rising input costs and global competition. CBA is a process for understanding the elements that make up the cost of a product or service, and it can be used to evaluate competitiveness and the economic impact of executive decisions. The report defines CBA as the process of building and understanding the elements that make up the cost of a product or service, and it also refers to it as clean sheet costing, open book costing, should cost analysis, teardown analysis, price breakdown analysis, or supplier cost analysis. The report emphasizes the importance of discovering the main drivers of a supplier's costs in traditional arm's-length relationships and in strategic supply alliances.
