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Product Cost Management PPT Slide Template

The strategy of product cost management faces the challenge of controlling the various cost factors and practices that influence target costing. Effective cost analyses are a key factor for successful businesses and in competing against trade rivals.

Visualize your strategies and steps for effective product cost management with this PowerPoint template:

Gain a visual overview of the most important product cost management processes and optimize your production strategy.

Product Cost Management PPT Slide Template

  1. 1. PREMIUM POWERPOINT SLIDES Management Product Cost
  3. 3. Product cost management is the system that covers the full cycle of a product or service from its early stages and onward.
  4. 4. Product cost managementhas been neglectedby manycompaniesin recent years…Whoeveradapts fastest and mostefficiently to the new circumstances can gain considerable advantages. Bernd Schröder, 2015 (Partner at Management- and IT-Counselling MHP)
  5. 5. INTRODUCTION Demand for Product Cost Management Products differ only slightly or not at all in terms of technological performance and quality standard. With market equalization, the price factor is becoming more and more important for companies in regards to competition.
  6. 6. INTRODUCTION Total Cost of a Product DisposalCosts product planning, development procurement manufacturing OperatingCosts training maintenance, repair energy UtilizationCosts disposal, dismantling recycling, de installation sales/ revenue Product Cost Management of the Life Cycle Cost
  7. 7. INTRODUCTION Causes of High Manufacturing Costs Hohe Herste llungs- kosten Over engineering, hightechnical effort Variety Unnecessary functions Wrong suppliers Hightest and inspection effort Complex product structure Inconvenient installation Montage WRONG SUPPLIERS (construction side, shopping) MARKET INFLUENCE (customer focus)
  8. 8. INTRODUCTION Study Results Cost management is a vital component of corporate strategy Cross-departmental communication, cooperation and… Market and customer orientation of value creation and… Employees' acceptance of organizational… Cost structuring and cost optimization from the early… Key responsibility Automotive OEMs Automotive Suppliers 90 company ratings for the following statements on product cost management
  9. 9. METHODS Savings with Product Cost Management Hard Cost Savings Weiche Kosteneinsparungen Avoid spending during product design Time savings in cost estimation and quote response Reduced tooling costs Engineering time savings to accelerate market launch Savings from optmizing manufacturing process selection Reduced post-launch rework Savings during redesign Widespread manufacturing knowledge among engineering and sourcing Companies gain a huge advantage by continuously implementing these savings:
  10. 10. METHODS DTC: Reverse Engineering (RE)  Objective: reconstructs an exact duplicate of an existing object  examines all construction elements (structure, condition, behavior)  compares a product’s performance, function and properties from a technical perspective  discloses differences in costs from competitors  is the first stage of benchmarking
  11. 11. METHODS Design to Cost (DTC Method): Elements Target Costing (TC) Reverse Engineering (RE) Quality Function Deployment (QFD) Value Analysis (VA)
  12. 12. METHODS Design to Cost (DTC Method): Cost Influence Target Cost High Low Customer value Low HighCompany profit Function Finance FormFit
  13. 13. METHODS Difference between Traditional Product Cost Management and Target Costing (TC) Production TraditionalProductCost Management TargetCosting Market Research Product-Specific Features Design Development Material Price Cost Planning/ Calculation Market Research Product-Specific Features Production Target Costing Design Development Material Price Costs to high. Back to the design phase
  14. 14. METHODS Concrete Tools Design-for-6-Sigma  each product has a quality level depending on customer needs  customers perceive an increase in quality, while at the same time, cost reduction and accelerated process improvement take place  result: customer loyalty and increased market share Parametric Cost Estimating  This is a statistical estimation method using regression analysis that includes existing data and variables from previous projects.  The result is an estimate of the content, scope, cost, budget and duration.
  15. 15. METHODS Profitability Profile for the Entire Product Life Cycle ACTIONS TO OPTIMIZE PRICE ACTIONS TO OPTIMIZE PRICE Conception Development Production/ MarketPhase AfterSales ProjectRelease Start of Development Start of Production (SOP) Endof Production (EOP) Endof Life (EOL) TargetPrice EstimatedCosts Cost Gap ProductTargetCosts Realized Costs Predicted Results Target Results Realized Results 1 2 4 3
  16. 16. INTRODUCTION costs Material costs (payer directly attributed) Material costs Manufacturing costs Total costs (payer) Material overheads (payer not directly attributed) Production costs (payer directly attributed) Production costs Production overheads (payer not directly attributed) Special production costs (tools, patents and licensing, materials analysis, developed models and templates, etc.) Administrative costs Administrative and distribution costsDistribution costs Cost Type distribution costs (e.g. commissions, outgoing freight and taxes, packaging, selling licenses) Overview of Various Types of Costs
  17. 17. INTRODUCTION Cost Determinants Marketing Disposal Distribution Time Life span Environmental impact Installation Weight Competition Surface quality Model series compatibility Accuracy Testing Prototypest Compatibility Quantity Size Production steps Material Production type Production process Cost Influence
  18. 18. CHALLENGES Obstacles in Product Cost Management Purchase Price Operating costs for electricity, materials, technology One-time costs for commissioning, training One-time costs for transport, delivery One-time costs for sustainability and disposal Maintenance and repair costs Poor customer
  19. 19. CHALLENGES Considering Other Substantial Aspects of Cost Management Delay in market launch Damage to product quality Reduced product sales Poor customer satisfaction Decrease in competitiveness 01 040302 05 x
  20. 20. TRENDS Cost Types Gaining Importance Due to Trends in a Company Which of the following cost types are gaining importance due to trends (in %)? (89 companies) 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 60,00% 70,00% 80,00% Research and developmentcost HR cost Material cost Marketing and sales cost Abatementcost Environmentalcost Production cost Operating cost Service cost Administrative expense Warranty cost Recyclingcost
  21. 21. CHECKLIST Questions about Product Cost Management What role does product cost management play at your company? This is a placeholdertext. Can savings be determined within the product design? This is a placeholdertext. Can you buy cheaper materials for manufacturing products? This is a placeholdertext. If the information flow for cost estimates sufficient in all areas of the company? This is a placeholdertext. Can redesigns and product developments be better optimized in costs? This is a placeholdertext. Is the cost estimate the most current calculation and clearly recognizable for every employee? This is a placeholdertext.
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