Product Cost Management Solutions

Target Costing

What is target costing

Target costing supports in achieving significant cost reductions and increase the transparency of the cost trend and the adopted measures.

Most manufacturers still use spreadsheets for target costing. The results are inflexible and difficult to compare. Due to regularly occurring changes in product development or customer specifications, the process often has to be run repeatedly. When developing new products or comparing variants, there is seldom any meaningful geometric data available at an early stage, which made a purely parametrically based solution irrelevant for target costing.
Manufacturer need to be able to make reliable statements about costs at an early stage, when it has to go quickly based on initial information. With enterprise resource planning (ERP) systems, it is possible to calculate product costs after the start of production based on actual production data and supplier prices. Cost simulations for future products are not possible using the ERP systems. This leads to the demand of a solution with standardized calculation methods that supports efficient target costing processes early in the life cycle.

Design-to-cost with Teamcenter product costing

With target costing, you can create reliable cost comparisons at a detailed level that enable justification of discussions and decision-making. The advantage of the database-supported solution is that reliable product calculations and target cost derivations can be generated on assemblies and components level even at very early stages of product development. Internal and external benchmarks support this process. The solution combines all of the company’s cost information into one central database, which makes certain that all employees use the same basis. Through the state of the art integration technology you can easily reuse costing relevant data from SAP ERP systems. It reduces significantly the time to create accurate calculations for target costing. Teamcenter® product costing can be used for preliminary costing by all affected areas including cost engineering, procurement, finance and program management, in order to achieve a uniform standard for transparency, availability and reliability of the data.

Your benefits

With Teamcenter product costing, you can achieve significant cost reductions in target costing and increase the transparency of the cost trend and the adopted measures. The bottom-up cost calculation solutions for target costing provides a robust depth of detail and accurate cost transparency at a very early stage. Reliable best-practice calculations can be made with the valid benchmark data available in Teamcenter product costing. With Teamcenter product costing you can increase significantly the number of supported projects in the target costing process.

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