Many companies are still using isolated databases and spreadsheets, even for cost calculations in early stages of the product development process. Typically, enterprise resource planning (ERP) systems do not provide sufficient support for a reliable cost analysis in the early phases of product development.
Teamcenter® product costing provides an enterprise-wide platform for creating and managing calculations and captures the company’s internal costing expertise centrally. Teamcenter product costing also provides the ability for data exchange between ERP and product lifecycle management (PLM). Product costing uses the methodology of the classic overhead calculation based on a bottom-up approach. This approach is based on a detailed product structure and defines the use of materials and the process costs. Calculations are based on current benchmark data for manufacturing technologies, machines, materials and worldwide labor costs. Various departments, such as cost engineering, purchasing, controlling and sales, can work together by using Teamcenter to achieve the maximum benefit.
Product Costing
Make smarter product costing decisions early in the lifecycle
Product Costing
Many companies are still using isolated databases and spreadsheets, even for cost calculations in early stages of the product development process. Typically, enterprise resource planning (ERP) systems do not provide sufficient support for a reliable cost analysis in the early phases of product development.
Teamcenter® product costing provides an enterprise-wide platform for creating and managing calculations and captures the company’s internal costing expertise centrally. Teamcenter product costing also provides the ability for data exchange between ERP and product lifecycle management (PLM). Product costing uses the methodology of the classic overhead calculation based on a bottom-up approach. This approach is based on a detailed product structure and defines the use of materials and the process costs. Calculations are based on current benchmark data for manufacturing technologies, machines, materials and worldwide labor costs. Various departments, such as cost engineering, purchasing, controlling and sales, can work together by using Teamcenter to achieve the maximum benefit.
Product costing enables you to make smarter decisions early in the lifecycle. Read more below.
Design-to-Cost
You can represent the entire price structure of your products in Teamcenter product costing, and cost engineers can see the impact of development-related changes on the price at any time. You can identify the cost drivers early in the development process, and suggest alternative solutions. With the opportunities for cost simulation in Teamcenter product costing, such as comparison of manufacturing technologies, you can also reproduce different scenarios for manufacturing.
Profitability Calculation
With the profitability calculation, executives can secure product investments by predicting future unit costs and prices over the entire product lifecycle. You can transparently break down annual costs, revenues, and cash flows and provide the basis for relevant indicators, such as internal rate of return, net present value, and payback periods. Using the discounted cash-flow calculation, you can determine the profitability of your projects and compare projects to make the best investment decisions.
Purchase Price Analysis
With the purchase price analysis included with Teamcenter product costing, as a buyer or procurement officer, you can run reliable cost estimates of supplier parts on different commodities ("shadow calculations"). Teamcenter product costing also helps you in cost structure negotiations and value engineering workshops with suppliers. Based on these cost estimates, you can negotiate future target prices or purchase prices based on reliable cost details. If desired, you can establish an open-book policy.
Quotation Costing
Teamcenter product costing supports in increasing speed and accuracy of request-of-quotation responses which helps companies to win more business. It helps you negotiate with your customers using "optimized but comprehensible" cost data in customized formats. You can use and explain this data in open-book conversations with the customer’s costs experts to establish your price. By presenting a clear cost structure and plausible breakdown of the product costs, you have a stronger negotiating position in cost negotiations.
Target Costing
Cost engineers can use Teamcenter product costing to determine product cost in the early stages of preliminary costing and target costing. You can calculate complex assemblies and versions accurately and quickly. The entire price structure of your products and variants based on the bills of materials and bills of process can be reproduced. You can also determine and itemize direct costs and overheads, manufacturing steps and processes, and materials and process parameters.
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