Product Costing

Most manufacturers don’t have all the tools they need to reliably contain or reduce costs on products and projects. The key missing pieces typically include a view across the extended enterprise with multiple disciplines; a view of lifecycle costs, starting with design or project engineering and moving through supply, production, distribution, and, where relevant, aftermarket service; customer needs balanced with costs; forward-looking cost analysis; and a means of creating visibility and accountability for those who contribute cost.
Fortunately, cost management software solutions are available that address these needs. The appropriate choice depends largely on industry segment because many of these products model costs based on critical differences in processes, materials, and resource requirements. A few providers have more generic systems tailored to cost and profitability management.
The business intelligence approach: IBM Cognos, Oracle (Hyperion), SAP (Business Objects), and SAS all offer analytical tools to show costs. These BI-based solutions rely on users to input correct cost data to generate the appropriate analysis. Oracle and SAP can connect these tools into their PLM solutions to help guide engineering decisions.
The PLM approach: Major PLM vendors Dassault Systèmes, PTC, and Siemens PLM have analysis capabilities that cross disciplines and the product lifecycle. For process industry infrastructure in the oil and gas, utilities, and mining arenas, Hard Dollar’s software focuses on project management, including costs. AspenTech delivers a view for the front-end engineering process prior to the CAD/BIM stage.
Engineered or project industries: Engineer-to-order and project industries have long needed cost-estimating tools for sales quoting. One such tool comes from Micro Estimating Systems, which uses metalworking standards to calculate costs. PRICE Systems’ TruePlanning for A&D and government projects not only helps to estimate and analyze costs,