Event Information
How SAP Product Lifecycle Costing is helping customers increase Margins (NPI) & Quote-Win rate
PLC @ SAP Controlling Conference Oct 6-9, 2019 San Diego, California
SAP Product Lifecycle Costing (PLC) solution was selected to present at SAP Controlling 2019 Conference. At this event i got chance to talk on how SAP Product Lifecycle Costing solution is helping customer drive higher margins for new /continuous improvement products and quote-win rate especually for Engineer to order scenarios quotes.
SAP Controlling 2019 conference is focused around management accounting topics attended by diverse attendees like end-users, managers, Controllers, CFO’s and consultants dealing with master data, transactions, configuration, and reporting for managers.
PLC session was attended by majority of attendees from consumer products companies like NIKE, Michael foods and pharma/chemical process industries like United Therapeutics Corp and Tronox. Caterpillar, Suncor Energy and Phifer attendees added interesting perspective from discrete manufacturing point of view.
We had very lively Q&A session exploring PLC capabilities in space of doing simulations across products and product portfolios. We delved into PLC’s ability to work with multiple data sources for master data and cost structure and generate cost estimates and alternatives based on different costing models that users can apply. Below is a slide that explains PLC’s flexibility to leverage data from multiple sources to stitch together estimate providing cross department visibility and collaboration ability.
Typical use cases for PLC were presented highlighting how PLC can aid with accurate cost estimates from early ideation phase to post production stages even using unstructured information.Below slide explains uses cases in context of different stages in product life cycle.
PLC’s latest functionality released over last one year was also shared with attendees and was well received especially ability to track changes and tag items with context to aid review.
Attendees from small & mid- size organization were excited to hear about cloud subscription offering and very short implementation timelines. There was good discussion around major functionalities and benefits of implementing PLC as standalone or along with native SAP ERP/S4 master data sync.I explained how major and essential functionalities can be enabled in short implementation cycle and how additional customer specific enhancement can be enabled in later phase to get business enabled with PLC after first phase.PLC direct link with BOBJ and SAP Cloud Analytics was also liked by attendees .
Key highlight of session was about attendees learning about its short implementation timeline and its flexibility to work with SAP/Non-SAP tools and multiple data sources to provide one common platform for costing. PLC cloud offering was particularly very attractive for mid size and small organizations. Some of the key take away for attendees was understanding how PLC can help reduce product cost and have good insight in future profitability .
Manthan Peshne
PLM Solution Architect / PLC NA GTM Lead
Hi,
I have few questions relevant to PLC, hope you can help me with your answers.
I understand the main functionality of the PLC is Preliminary cost estimation for new products as well as for continuous improvement products.
But is there is any possibility to do detailed sales planning in the initial stage of new product? With profit planning & Return on investment plan?
and the other requirement is can we bring the actual sales values and compare plan and actuals?
The above 2 questions are requirements from my customer, currently for any new product they do this manually during the initial stage of the product.
So along with the cost estimation, they also want do sales planning, investment planning and profitability estimation.
Thanks for your support.
Best Regards
Narasimham Thokala
Hi
It is intersting to see the PLC and I do have few questions on the quotation costing.
a) Can we get to the margin level details as full cost model and quote pricing using PLC or any other tool?
b) Also relate to the contract planning and execution models if the quote is aproved.
Regards
Ramu Kengua
Hi Ramu,
Thanks for your interest. Pls see answer below -
a) PLC help calculate unit cost and total cost ( volume) for a product or products. You can flexibly apply costing model which can cover direct overheads, generic burdens, COGM and COGS calculations . you have flexibility to use formulas or rules to calculate margin based on sales price . You can also link ERP pricing conditions or other non sap quoting tool pricing conditions/rules.
b) PLC Can flexibly model structure of Quotation items and detail further details for costing purposes . As part of implementation calculation from PLC can be sent back to Contract planning and execution model.
Please let me know if you have any further questions.
Thanks,