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Product Cost Management for Automotive Suppliers

Product Cost Management for Automotive Suppliers
To win new business, automotive suppliers must demonstrate capabilities to meet target price estimates, and act as true collaborators in reducing program costs. With an integrated product cost management solution that combines the power of a PLM platform with sophisticated product cost management tools, suppliers can forecast and analyze target costs, best cost-based purchase prices and profitable sales prices.
To win new business, automotive suppliers must demonstrate capabilities to meet target price estimates, and act as true collaborators in reducing program costs. With an integrated product cost management solution that combines the power of a PLM platform with sophisticated product cost management tools, suppliers can forecast and analyze target costs, best cost-based purchase prices and profitable sales prices.

On-Demand Webinar

Automotive cost management and profitability analysis during new product development and introduction (NPDI)

Cost Estimation & Management Software for Automotive Supplier

Learn within our webinar how a cross-functional collaborative cost estimation and management solution can help your company define profitability at an early stage of the product lifecycle.

Product Cost Management for Automotive Suppliers

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OEMs and Tier 1 suppliers expect price reductions from downstream suppliers as part of their continuous improvement initiatives. In the pursuit of vendor consolidation, automakers are looking for suppliers that can demonstrate capabilities to meet target price estimates and act as true collaborators in helping to reduce program costs. The ability to accurately estimate costs is critical for automotive suppliers to win or lose business.

Siemens PLM Software offers an integrated product cost management solution that combines the power of the world’s leading global PLM platform with sophisticated product cost management tools all in one system. Auto suppliers can implement standardized costing methods and analyze accurate estimates of product costs.

The knowledge of cost drivers and how engineering changes affect estimates are critical in realizing product cost targets. Integration with the PLM platform enables cost engineers to work within the context of the product lifecycle to obtain reliable cost estimates regarding target costs, best-cost-based purchase prices and profitable sales prices.

Product Cost Management for Automotive Suppliers

Solution Capabilities

Bill of Materials Management

Teamcenter helps you know your product by providing a common source of BOM information across your organization. Whether you need basic BOM management, or more advanced BOM management and configuration with greater flexibility and scalability, you can meet and exceed the market demand for more innovative and varied product offerings.

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.

Tool Purchase Price Analysis

For the tasks within the purchase price analysis, cost engineers can use the Teamcenter solution for tool costing to do shadow calculations as a plausibility check on the calculations of their suppliers. They can use Teamcenter tool costing information such as technology data, part descriptions or 3D-data to create cost calculations using the parametric methodology.

Tool Quotation Costing

The quoting process for tooling must be reliable and inexpensive, with precise tool calculations and transparent cost breakdowns in a short time frame. The parametric calculation methodology in Teamcenter tool costing enables an optimum balance between accuracy and time-based calculation effort.

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