Germany is and will remain a top country for innovation. This is also demonstrated by the recently published EU Innovation Report, in which Germany took third place, with countries such as Denmark and Sweden leading the field. Consistent and integrated product cost management is necessary from the very beginning of the product development process (PDP) if Germany is to regain first place. This is the only way of obtaining a strong competitive and cost-oriented position, since developing a product typically consists of five phases in which R&D and production must collaborate closely from requirements specification and product development to prototyping, industrialization and start of production. Efficient cost management across all phases can establish structured processes with clear lines of action and responsibilities as well as increase transparency with regard to costs.
Success Factors in the Phases ROI has identified four success factors for integrated product cost management in the course of various best practice projects:
• Clear cost strategies and a coordinated set-up The basis is formed by a clear cost strategy covering the dimensions of product structure, production process and procurement. Here cost management should be based on reference structures and benchmarks from an early stage. Integrated data models also create the conditions for transparent cost planning simulation and calculation over the entire product life cycle.
• Explicit cost processes anchored in the PDP and in series production Value engineering ensures customer-focused development. In order to achieve this, companies must anchor the right processes in the PDP in order to eliminate unnecessary functions and to develop cost-efficient and robust solutions for those functions that are required. An advanced value analysis enables cost effects to be achieved through the application of best practices in product and process design using structured and standardized methods.
• A cost-conscious organization and clear responsibilities Process- and task-specific responsibilities must be fully specified and assigned.
• The right methods and tools A systematic selection of methods and tools in the PDP phases and in series production is essential for the success of product cost management.
„Levers for significant cost reductions can be applied to product and process through targeted activities anchored in the product development process and in series production. For example, companies can use them to eliminate unnecessary functions and components and to implement required functions in a cost-conscious way,“ explains Hans-Georg Scheibe, Member of the Management Board of ROI Management Consulting AG.
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