Profitability Calculation in the Product Development Phase, From Early Concepts to Product Launch

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In recent years, the difficulties faced in the field of product creation have evolved significantly. The market and client side needs are becoming more complicated while lifecycles are getting shorter in many industrial sectors. To adapt to varying client needs in international marketplaces, product portfolios are likewise becoming more diverse. To guarantee compliance with regulations, a number of company-wide standards must be completed. Due to limited information and unstable cost components, it is challenging to estimate the cost of a new product in its early stages.

If the calculating process is serial and uses a variety of interfaces, and if multiple worldwide subsidiaries may be involved in the process, then obvious flaws are observable inside the process. Even at the early phases of growth, many businesses continue to use standalone databases and spreadsheets for profitability calculations. This highlights the danger of basing business choices on faulty data.

Profitability Calculation Enables Executives to Secure Product Investments by Predicting Future Unit Costs and Prices Over the Entire Product Lifecycle.

Profitability Calculation With Teamcenter Product Costing

Early on in the development phase, you may determine the profitability of projects across their full lifespan using the profitability calculation. This competence is crucial for identifying successful projects since a significant portion of the production expenses are already determined in the early stages. Modern integration technology makes it simple to reuse cost-related data from SAP ERP systems. The capital expense for the next project may be determined using this data from the product calculation. The predicted price and cost variations across the life cycle are indicated by the dynamic profitability calculation in Teamcenter. The cash flow calculation and a summary of all indicators throughout the product supply chain are provided by the profitability calculation.The profitability calculation, which is based on discounted cash flow, offers a number of important performance measures, such as net present value, internal rate of return, and payback to evaluate the profitability of projects.

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Your benefits

As a result of the cost-related data being consolidated by Teamcenter Product Cost Management, a collaboration platform for cost management in the new product development and introduction (NPDI) phase is made available. The integrated profitability calculation, which is based on a single database and combined with product and tool cost estimates, enables you to identify and plan which investments are lucrative early. With the designated alternatives for scenario analysis, you are always informed of the dangers and possible income. Effective risk management is ensured throughout the lifespan of the product thanks to the openness of risk ratios. By combining computation, planning, and profitability calculation on one integrated platform, Teamcenter product costing offers the best assistance for finance in the area of comprehensive profitability.

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