According to the users´ needs, we divided the former Product & Project Costing component into two applications. With CONTACT Elements 15.2, the Elements Library now includes two dedicated and significantly expanded modules for managing project and product costs. The design and functionality of these solutions have been closely coordinated with customers. The building block for project costs is also the basis for (optional) product cost management.
Project Costing
The systematic breakdown and scheduling of all costs incurred in a project is a central task not only in the context of quotation calculations, but also in project management. The aim is to detect budget or plan overruns during the project at an early stage and to react accordingly. Essential functions of Project Costing are:
- Break down the project costs according to demand using digital cost sheets, folders and items
- Synchronize costs and deadlines between cost & work breakdowns automatically
- Automatically synchronize cost items with the ERP system
- Compare budget, planned and actual costs
Further information about Project Costing can be found on our homepage.
Product Costing
CONTACT Elements version 15.2 extends the Product Costing functionality in essential points. Emphasis is the deep integration with MS Excel for manufacturing cost calculation for new product components. There are also new functions for apportioning project cost items to individual product components and for taking time effects into account.
Challenges of a professional quotation calculation
Product Costing supports the quotation calculation, i. e. the calculation of an economical quotation price for the development and production of a new, possibly varied product. The essential questions that need to be answered are:
- What parts and operations are required to produce the product?
- How high are the manufacturing costs of the required parts and processes?
- What are the initial project/non-recurring costs?
- How are the one-off costs charged? For example, allocate to part costs, settle directly or amortize over sales revenue?
- What sales volume is expected along the production years?
- What temporal effects on production costs and sales are to be taken into account over the production years with regard to inflation, rationalization, currency and salary developments, etc.?
Excel or database?
A company's requirements for quotation costing are usually specific, complex and highly variable. The advantages of a spreadsheet solution are obvious. Users appreciate their high flexibility and performance, easy adaptability and familiar operation. However, there are some substantial disadvantages: low degree of integration combined with high manual effort for data transfer, lack of collaboration, documentation and evaluation possibilities, high error susceptibility, inadequate access protection and finally insufficient security of validity. This is a situation that companies can´t accept when it comes to costs and the high risks arising from fixed agreements with customers and suppliers. Users on the one hand and administrators and managers on the other have different perspectives.
Excel and database!
CONTACT Elements Product Costing combines these requirements! Calculators continue to take advantage of Excel to calculate the manufacturing costs of new parts and operations flexibly, taking into account specific parameters. At the same time, these calculation containers are initialized and managed in a validated and access-protected manner in the respective project and quotation context. In addition, both input parameters and results from the container are automatically compared with the Product Costing database and are thus immediately available to all authorized persons worldwide at the touch of a button. This means that you are able to report beyond individual calculations, and the overall process and data management can also withstand strict rules on security of validity and compliance!
Further information about product costing can be found on our homepage.
Your contact person: Dr. Jan Kickstein, Product Owner Project & Product Costing
