Product Costing

Understanding the cost structure of components made in-house or procured externally is often crucial in determining whether a product is successful in the market in the long term. In order to ensure this is the case, continuous optimisation is a topic which must always be addressed under cost engineering.

Process
cost analysis

  • 1

    Procurement

  • 2

    Teardown

  • 3

    Generation of component
    and process structure

  • 4

    Photo
    catalogue

  • 5

    Costing
    assumptions

  • 6

    calculation

  • 7

    Presentation of
    costing results

  • 8

    Negotiating
    support

  • 9

    Workshops

  • 10

    Simulation
    of changes

  • 11

    Implementation
    support

Product costing - Disassambly, documentation & calculation

Irrespective of the phase in the product life cycle, product costing allows in-depth insights into cost allocation and value management. With the aid of the cost analyses, price-drivers can be clearly identified at any time, general cost reduction potential ascertained and implementation planned.

Detailed
knowledge base

In order to create full cost transparency, you can rely on our strong multi-disciplinary team of specialists. To implement the costing and to optimise the product costs, we also have our in-house costing tool “ACT” in addition to our own workshops and laboratories for dismantling products. ACT contains data from a current and reliable knowledge base covering all relevant cost factors (material prices, machine data, wage costs, overhead costs etc.). ACT is optimally designed for product costing and subsequent cost engineering measures.

Calculation of production costs

All relevant cost units are taken into account, including

  • Direct costs (material, production, assembly)
  • Indirect costs (energy consumption, machine wear and tear, administration costs)
  • Logistics costs (transport, warehousing)
  • Quality costs (rejects, rework)

Reducing product costs – measures for more competitiveness

The manufacturing costs of a product are made up of a number of complex factors. Our expertise lies in precisely analysing these cost structures and providing our customers with a transparent basis for identifying cost drivers quickly and optimising them in a targeted manner. Based on our detailed cost calculation, the following measures can be implemented:

  • Reduction of material costs: Optimisation of expenses for raw materials, purchased parts and reduction of material-related scrap.
  • Increased efficiency in production: Reduction of direct production costs through optimised wage costs, machine hour rates, set-up times and scrap rates.
  • Reduction of overheads: Identification of targeted savings potential without compromising product quality.
  • Optimisation of the supplier structure: Strategic and data-based negotiations to strengthen supplier relationships and optimise purchasing.

The advantages of product costing

A comprehensive understanding of the composition of a product’s total costs is essential for developing a profitable pricing strategy and ensuring the profitability of individual products. The knowledge gained from product costing enables companies to deploy resources efficiently and make well-founded decisions.

A comparison of your own product costs with the industry average can reveal potential for optimisation, which can be further specified through additional benchmarks. Product costing plays a central role in continuous improvement initiatives by identifying potential savings and efficiency gains. A regular analysis of product costs also strengthens a corporate culture that is geared towards sustainable optimisation and cost efficiency.

Cost down. Succes up.

Full transparency to be better than the competition. AWS Benchmark & Cost Down.

Cost down

Proven
competence

20 years of experience in the entire field of cost analysis in a wide range of industries makes AWS a reliable partner for analysing cost structures and identifying cost reduction potential.

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