The challenges in the field of product development have changed dramatically in recent years. In many industrial sectors, there are increasingly complex requirements from the market and the customer side, while at the same time shortening lifecycles. Product portfolios are also diversifying to meet different customer requirements in global markets. Various company-wide requirements must be met to ensure regulatory compliance. It is difficult to determine the cost of a new product in an early stage due to incomplete information and volatile cost components. Evident weaknesses are visible within the process, if the calculation process is serial using a variety of interfaces, and various international subsidiaries may be involved in the process. Many companies are still using isolated databases and spreadsheets, even for profitability calculations in early stages of development. This implies the risk of making business decisions based on incomplete data sets.

Profitability calculation enables executives to secure product investments by predicting future unit costs and prices over the entire product lifecycle

Profitability calculation with Teamcenter product costing

With the profitability calculation, you can calculate the profitability of projects over the entire lifecycle early in the development process. Since a large part of the production costs are already established in the early phase, this capability is a decisive factor for the identification of successful projects. Through the state-of-the-art integration technology, you can easily reuse costing relevant data from SAP ERP systems. Based on this information from the product calculation, the capital expenditure can be calculated for the upcoming project. The dynamic profitability calculation in Teamcenter indicates the expected price and cost changes over the life cycle. The profitability calculation provides a cash flow calculation and an overview of all indicators along the product supply chain. Based on the discounted cash flow, the profitability calculation provides various key performance indicators, for example, net present value, internal rate of return, and payback to assess the profitability of projects.

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Your benefits

Teamcenter product cost management consolidates the cost related information and thereby provides a collaboration platform for cost management in the new product development and introduction (NPDI) phase. You can recognize and plan which investments are profitable earlier with the integrated profitability calculation, based on a central database and merged with product and tool cost calculations. You are constantly up-to-date about the risks and potential revenues with the specified options for scenario analysis. The transparency on risk ratios ensures efficient risk management throughout the product lifecycle. Teamcenter product costing provides optimum support for finance in the field of comprehensive profitability calculation with the unique approach of merging calculation, planning and profitability calculation on an integrated platform.

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Profitability Calculation