Customers today demand products to be developed with shorter lead time to market, higher quality and reliability, faster delivery and service, and affordable price whilst adhering to stringent design requirements. Companies that are being forced to meet these challenges, mostly focus on meeting the design requirements. In the process cost gets side-lined.This paper will help to interpret the benefits of Should-Cost Modelling and explain how effectively sourcing and engineering can use this to achieve better cost reductions and overcome challenges.