Accurate calculation of costs is key for sustainable economic success
byEmiliaM07-12-201612:25 PM - edited 07-13-201604:29 AM
Achieving the desired profit margin on each product to be sold is determined by setting the appropriate price for the market and heavily dependent on knowing the costs for the product.
It is surprising how big the deficits are in this area for many automotive suppliers: It requires often time consuming activities to identify all the costs and to provide a quotation, additionally the information on costs often is not accurate. One reason for inaccurate costs are multiple interfaces through which the calculation needs to run through, e.g. when several international subsidiaries are involved in the process. It is also often not transparent enough, which criteria and which approaches the procedure used within the individual stages of the calculation process.
To address this common problem, the cost calculation process itself must be standardized and made more efficient and transparent to allow greater confidence in cost projections and profit margin targets.
Learn how a supplier, specializing in the development and production of components and systems for automobile interiors as well as driver and passenger seats for commercial vehicles, was able to achieve high accuracy in costs quotations which increased competitiveness ultimately lead to winning contracts and economic success for the subsequent products.
“With Teamcenter Product Cost Management, we have implemented our strategic approach, including our functions across the entire value chain, from acquisition through to series production, merged in the calculation process and represented in a common global system landscape. Thus, we ensure a stable, transparent and consistent global standard within the Grammer Group.” Josef Trettenbach, Vice President Controlling, Accounting and Purchasing at Grammer.
The article explains how Grammer achieve a reduction of 50% in the time to generate a quote and up to a 15% cost savings in the quotation process on certain projects with suppliers.