Product Cost Management

Take control of product profitability by performing product cost management early in the product lifecycle, and make smarter product costing decisions

When you’re developing a new product, you need to be innovative. You need to understand the market opportunity. You need to deliver a quality product, and the timing needs to be right. Perhaps most importantly, you need to be cost-conscious. No matter how great your product is, it cannot be successful without profitability.
The Teamcenter product cost management solution helps your products succeed with product costing capabilities you can use at the time when decisions matter most: in the early stages of the product lifecycle. You can simulate, analyze and optimize your product costs to make the right decisions at the right time and ensure product profitability.

Achieve Target Costs

Cost engineers can use the Teamcenter product cost management solution to determine product cost in the early stages of pre- and target-costing. You can:

• Calculate complex assemblies and versions accurately and quickly
• Reproduce the entire price structure of your products and variants based on the bills of materials (BOMs) and bills of process (BOPs)
• Determine and itemize direct costs and overheads, manufacturing steps and processes, and materials and process parameters
  An extensive and cost-relevant database allows you to simulate different scenarios, including production sites, machines, and pre-configured reference processes for numerous manufacturing technologies and cost rates.

Manage Profitable Projects to Secure Investments

With the profitability calculation, executives and managers can secure product investments by predicting future unit costs and prices over the entire product lifecycle. With product cost management, 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 as well as compare projects and programs in your company (including return on investment, return on capital employed, and return on sales) to make the best investment decisions.

Know What a Purchased Part Should Cost

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.

Delivering Cost-adequate Product Designs

You can represent the entire price structure of your products in Teamcenter, 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 cost management, such as comparison of manufacturing technologies, you can also reproduce different scenarios for manufacturing.

Negotiate from a Strong Position with Customers

Teamcenter 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.

Integrate Parametric and 3D-based Tool Costing

With the Teamcenter solution for tool costing, you can create timely and reliable cost estimates for the quotation and tool cost analysis. Teamcenter provides a variety of tool technologies, including injection molding, die casting, and composite tools. You can read the 3D data automatically or manually create the geometry parameters. Both the tool buyer and the tool maker – whether injection molding, die casting, cutting, stamping, or other production tools – can make decisions regarding the tool costs that are fully integrated within the Teamcenter product cost management solution.