Target Costing

Target costing helps to achieve and maintain business goals

Most manufacturers still use spreadsheets for target costing. The results are inflexible and difficult to compare. Due to regularly occurring changes in product development or customer specifications, the process often has to be run repeatedly. When developing new products or comparing variants, there is seldom any meaningful geometric data available at an early stage, which made a purely parametrically based solution irrelevant for target costing. Manufacturer need to be able to make reliable statements about costs at an early stage, when it has to go quickly based on initial information. With enterprise resource planning (ERP) systems, it is possible to calculate product costs after the start of production based on actual production data and supplier prices. Cost simulations for future products are not possible using the ERP systems. This leads to the demand of a solution with standardized calculation methods that supports efficient target costing processes early in the life cycle.

Target Costing

Most manufacturers still use spreadsheets for target costing. The results are inflexible and difficult to compare. Due to regularly occurring changes in product development or customer specifications, the process often has to be run repeatedly. When developing new products or comparing variants, there is seldom any meaningful geometric data available at an early stage, which made a purely parametrically based solution irrelevant for target costing. Manufacturer need to be able to make reliable statements about costs at an early stage, when it has to go quickly based on initial information. With enterprise resource planning (ERP) systems, it is possible to calculate product costs after the start of production based on actual production data and supplier prices. Cost simulations for future products are not possible using the ERP systems. This leads to the demand of a solution with standardized calculation methods that supports efficient target costing processes early in the life cycle.

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