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: http://www.presentationload.com/product-cost-management-powerpoint-template.html Gain a visual overview of the most important product cost management processes and optimize your production strategy.

1. PREMIUM POWERPOINT SLIDES
Management
Product Cost

2. PRODUCT COST
MANAGEMENT
POWERPOINT TEMPLATE

3. Product cost management is the system that covers
the full cycle of a product or service from its
early stages and onward.

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. 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. 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. 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. 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. 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. 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. METHODS
Design to Cost (DTC Method): Elements
Target Costing
(TC)
Reverse
Engineering
(RE)
Quality
Function
Deployment
(QFD)
Value Analysis
(VA)

12. METHODS
Design to Cost (DTC Method): Cost Influence
Target Cost
High
Low
Customer
value
Low HighCompany profit
Function
Finance
FormFit

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. 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. 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. 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. 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. 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. 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. 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. 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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