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Author's profile photo Mukund Rao

What if You Could Have a Crystal Ball for Product Lifecycle Costing?

Industry watershed moments happen when technology finally catches up with a customer need. For the automotive industry, one of the main challenges is cost planning on the side of suppliers and manufacturers. Imagine that you’re an automotive supplier. Your departments are spread across continents – and every department works in a silo with its own tools and databases – so you’re spending extra money and have no single source of truth to show for it. It’s a frustrating and all-too-common scenario – but it’s about to change.

Automotive companies can now monitor product costs and control them from early engineering through the complete lifecycle. How? The watershed has arrived in the form of the SAP Product Lifecycle Costing solution (it is now available for early adoption customers as part of the Ramp Up program).

Drive down costs when you pick and choose the most profitable scenarios

SAP Product Lifecycle Costing uses the design and horsepower of the SAP HANA platform to enable real-time simulations – giving automotive companies carte blanche to run any number of cost simulations and quickly see results. Beyond simply weeding out unprofitable scenarios, you can also:

  • Standardize the costing process
  • Rely on one platform that can work with different inputs
  • Cut the time needed to generate quotations

Streamline the path of an automotive supplier

Every new product, no matter how innovative, has to be profitable. A part number might not yet exist and details are nothing more than a plan in the engineer’s mind. You still need to calculate cost factors for skeletal bills of material while they are taking shape, and continually adjust and enhance them.

The advantage of one platform and its integration with ERP is that it helps bring all the parts of costing analysis together for greater efficiency and visibility, including:

  • Master data related to the product structure that typically comes from CAD or product lifecycle management systems
  • Logistics valuation of the product, including the routings and line design that come from the manufacturing planners
  • Activity rates and overhead costs provided by the controller
  • Purchasing group that incorporates the purchase contracts among other factors

When you can more accurately calculate costs in the early stage of the product lifecycle, it’s easier to identify cost drivers and areas for improvement to create savings so costs don’t snowball down the line. With the added ability to create and compare alternatives in a real-time, intuitive interface, ROI is basically guaranteed.

Design with the customer, for the customer

SAP Product Lifecycle Costing was developed with customers in the discrete industries as part of a co-innovation process. This collaboration has made all the difference in producing a product that beats to the pulse of market needs. We developed the Excel-like user interface because that’s what customers requested in a survey. Role-based, individualized, and secure access to product cost structure versions and related collaborative tasks are incorporated to accommodate various responsibilities within the automotive structure.

By listening to customers first, we’ve minimized disruption and paved the way to smoother user adoption – so you can realize a fast ROI from this industry watershed moment.

Register today and learn more about SAP Product Lifecycle Costing and other technology trends influencing product management at the upcoming Automotive News webinar on Sept. 21st. Also visit us at our premier annual Best Practices for Automotive event Oct. 17 – 19th in Detroit and see the latest innovations including PLC and how it can benefit your organization.

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      Author's profile photo Former Member
      Former Member

      Very cool to hear that this is out. I was involved in some of the early co-innovation workshops. It was a great process and it looks like it has driven a very useful and forward thinking product.

      Author's profile photo Mukund Rao
      Mukund Rao
      Blog Post Author

      Thanks for the feedback and good to know that you were part of the co-innovation process.  The planned release of the product will be sometime before the end of the year. Will update the blog closer to the release date.