Design to Cost : Increase Your Profit Margin with SAP Product Lifecycle Costing
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1 Design to Cost : Increase Your Profit Margin with SAP Product Lifecycle Costing Vijendran Sundararajan, Manthan Peshne, SAP Manufacturing Industries Forum, Lombard, IL, 15 th June, 2016 Customer
2 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 2
3 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 3
4 The Challenge today Excel and legacy tools used for early cost estimates and planning but ERP for actual cost calculation Project Lead Engineering Manufacturing Engineer Sales X Sales Y Product Manager Others Procurement 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 4
5 Product Maturity Key Product Costing Use Cases Concept Acquisition Product / Process Development Production Ramp Up Start of Production MOVE Production DISPOSE Disposal Preliminary Cost Estimate (NPI, CI) Quotation Costing Lifecycle Costing Inventory Valuation (ERP today) Production Cost Simulation Engineering Bill of Materials Manufacturing Bill of Materials Unstructured data Structured data and values available (e.g. material, bill of material, routing, pricing information) Time 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 5
6 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 6
7 Solution Definition SAP Product Lifecycle Costing is a solution to calculate costs and other dimensions for new products or quotations in an early stage of the product lifecycle, to quickly identify cost drivers along the lifecycle and to easily simulate and compare alternatives. Real-time SAP HANA User Centric Excel-like UI Open ERP, Excel, PLM Flexible Cost Structure First class User Experience High Performance Integration with SAP ERP 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 7
8 Solution Key Capabilities HANA-based real-time calculation engine Master data from SAP ERP and any other data source Preliminary Cost Estimate Quotation Costing Lifecycle Costing Flexible costing structure design, from various sources MS Office-like user experience Versioning, simulation, and what if analysis Overview Video Price determination and confidence level Flexible foundation for reporting & analysis 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 10 8
9 Solution High-Level Overview Collaboration Collaboration Layer cross organization communication User Interface Calculation User Interface cost structure management with add-copy-change-delete features Preliminary Cost Estimate Quotation Costing Lifecycle Costing Functions Calculation Versioning Simulation Calculation Engine Analysis Visualization Material Master Prices Costing Sheet Material BOMs Document Structures Source & Target Data Purchase Agreement / Info Record Prices Existing Calculations Order BOMs Work Breakdown Structures Other sources / targets & Excel Activity Rates Cost Structure Templates Routings Product Structure Management Planned 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 9
10 Solution Main Views Calculation View Create your costing structure from SAP ERP, SAP PLM, Excel, or other data sources, or manually from scratch, and analyze the cost breakdown Cockpit View Manage your calculation versions and history centrally Administration View Maintain and manage all master data and settings in one conveniently structured view 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 10
11 Solution Different Ways of Costing Structure Creation As many calculations are created in MICROSOFT EXCEL, SAP Product Lifecycle Costing is designed to import any quantity structure to create a calculation as a whole, or to update an existing calculation at every level SAP Product Lifecycle Costing is integrated into the whole SAP landscape. Therefore existing Document Structures, Bill of Materials and related Routings can be easily imported from SAP ERP to create new calculations. Of course there is also the possibility to create a structure from scratch. SAP Product Lifecycle Costing simplifies that approach as well SAP SE or an SAP affiliate company. All rights reserved. Customer 11
12 Solution Different Ways of Price and Rate Determination Local Master Data Prices and rates for all different items can be determined by using the LOCAL MASTER DATA SAP Product Lifecycle Costing can be integrated into your SAP landscape. Prices and rates can be easily determined by getting data from SAP ERP SAP ERP Master Data Calculationspecific Data The user can also manually maintain CALCULATION-SPECIFIC prices and rates for each item in the costing structure SAP SE or an SAP affiliate company. All rights reserved. Customer 12
13 Solution Different Ways of Calculating & Analyzing the Costs Within a calculation you find the cost component split and the costing sheet on the right side in the details section. You can see that the user can choose which costing sheet or cost component split should be used to calculate or to break down the costs SAP SE or an SAP affiliate company. All rights reserved. Customer 13
14 Solution Different Ways of Calculating & Analyzing the Costs SAP BI Tools Example in SAP Analysis for Office: Cost Component Split View Examples in SAP Lumira 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 14
15 Solution Different Extensibility Options Open SAP PLC for extensions by customers and partners to address custom use cases and enable integration with 3 rd -party systems while ensuring data integrity and security. There are now four technical options with V1.1 to extend SAP PLC and integrate with external applications. Each option has different capabilities and enables different use cases. Backend API Standard / Custom HANA Views Custom Fields and Formulas Frontend Add-In Framework 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 15
16 Solution Different Extensibility Options Few Examples Integration from SAP Engineering Control Center ECTR Integration Video For each item display an image contained in an external system e.g. SAP DMS or SAP Visual Enterprise Integration with SAP JAM 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 16
17 High-Level Architecture SAP ERP Expert Frontend Microsoft Excel optional Communication / Validation Data Query / Processing API Legacy System optional Any Database Replicated ERP Master Data Local Master Data / Calculations / optional SAP HANA 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 17
18 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 18
19 Demo PLC with ECTR integration The Sales Manager identified a market opportunity for a specific compressor type which is applicable for the use on public roads in the USA. Send request for new product (variant) cost estimate Sales Manager asks the Engineering department to provide a quote for the new compressor type at a competitive market price and tailored to the requirements of the USA market. Sales Manager The Product Cost Controller receives basic product structure and performs preliminary cost estimation of the M171 US Road compressor based on the M171 Non-Road version. He identifies that for development of the new country version,mechanical adjustments, a new Trailer Light Kit US, as well as Software adaptation will d. Therefore the transferred structure is to be enhanced with new material list for the Trailer Light Kit US, the routing for the production and assembly, and the required Software development effort. The Product Cost Controller adds the materials, internal activities and processes into the structure, enters missing price and quantity data, and simulates alternatives (make or buy the Trailer Light Kit. Cost Controller Engineering receives request from sales Engineering identifies M171 Non-Road version serves as the basis for the USA country version to be developed. For the M171 Non-Road, a document structure is available with a BOM and CAD data in the SAP Engineering Control Center (ECTR). However, this basis version is not developed for the deployment on public roads and needs to be adapted 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 19
20 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 20
21 End-to-End Process CPQ Planned Integration to Cloud for Customer, Future Ideas regarding Costing Integration Available Planned Future/ Project Cloud for Customer Manage Account and Contacts hybris E-Commerce & CPQ Copy Opportunity Data to Quote Guided Selling / Configure Solution ERP Product Lifecycle Costing (HANA) Manage Activities Catalog, Search, Add Products Configure, Price Visualize 2D/3D Manage Leads Cross & Up-Selling ERP API Manage Opportunities and Pipeline Initiate Quote External Quote, Status Generate Quote in hybris Manage Quote Price, Cost, Margins Generate Proposal Quote Approvals, Status Convert Quote to Order Explode Configured BOM, Routing Engineer ETO Special Parts Material or Document BOM from CAD ERP Order Import Cost Structures Import ETO Special Parts - Material or Document BOM Exchange Standard Part with ETO Special Quote Costing & Simulation incl. ETO Replicate Cost Structure 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 21
22 Step 1: Enter Configuration, Save Quote (SAP hybris CPQ) 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 23
23 Step 2: Trigger ETO Special Request During Configuration, Save Quotation 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 24
24 Step 3: Load Quote with Configured BOM from hybris CPQ to SAP Product Lifecycle Costing (Using API for Extensions) 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 25
25 Step 4: Perform Engineering for ETO Special: Load from CAD to ERP Material BOM or Document BOM SAP Engineering Control Center 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 26
26 Step 5: Upload Material BOM/Document BOM/Order BOM from ERP to Product Lifecycle Costing, Replace Standard Part with ETO Part 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 27
27 Step 6: Costing & Simulation Multi-Currency, Inter-Company, Make vs Buy, Re-Use ERP Cost Data, Manually Complete Missing Data, Jam Collaboration, 3D, Excel Analysis 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 28
28 Step 7: Load Calculated Quote Cost to hybris CPQ, Manage Quote Price, Discounts, Costs and Margins 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 29
29 Step 8: Generate Quote Proposal Document SAP Document Presentment by OpenText, integrated to hybris CPQ 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 30
30 Step 9: Convert Quote to Order in hybris CPQ, Send Order to ERP 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 31
31 Step 10: Order Engineering Workbench in ERP Exchange Standard Wrist with ETO Wrist Release Order for Manufacturing 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 32
32 Agenda Challenge in Early Product Costing Challenge, Use Cases, Focus Industries SAP Product Lifecycle Costing Solution Overview Demo PLC with ECTR integration Use Case Walkthough PLC Integration Scenario with Hybris Roadmap Highlights & Summary 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 33
33 New Features : Projects Usage As categorization for calculations Project 1 Calculation 1 Version 1 Version 2 As quotes for customers containing different products (=calculations) Project Attributes Calculation 2 Version 1 Version 2 Version 3 has a defined start date and end date has volumes and costs distributed over time buckets and calculations is an object in PLC with master data assigned to it (which could correspond to master data from PS, PPM, CPM) 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 35
34 New Features : Cockpit View for Projects Projects are shown in the hierarchy in the cockpit Project can be created via New Project in the Cockpit View or in the Project View itself Project can be deleted including all contained Calculation in the Cockpit View (Warning is shown Calculations not assigned to a project are shown underneath the project Calculations Calculations can be moved to another project if it has the same controlling area If you copy a version with calculation header it can also be copied to other projects if they have a different controlling area SAP SE or an SAP affiliate company. All rights reserved. Customer 36
35 New Features in V1.2: Browse, Search, Sort Browse projects, calculations, versions Search projects, calculations, versions Sort by all attributes 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 37
36 SAP Product Lifecyle Costing Offers: First class User Experience High Performance Integration with SAP ERP Extensibility made for customers 2015 SAP SE AG or an SAP affiliate company. All rights reserved. Customer 38 22
37 30+ Manufacturing Customers work and have worked with us 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 39 7
38 Roadmap Q3 Q4 Q1 Next Workshop with German customers: Q2 Q3 Jul Heidelberg Q4 Oct Heidelberg Q1 Dec Dresden Next Workshop with US customers: Oct NSQ Releases: V1.0 V1.0.1 V1.0.2 V1.0.3 V1.1 V1.2 V2.0 V2.1 Today Custom Fields & Formulas, Add-In Framework Basic Projects & Search/Filter Cockpit Reference Calculations, Advanced Pricing Advanced Projects, Intercompany Interested in joining as co-innovation customer please get in touch with us directly 2015 SAP SE or an SAP affiliate company. All rights reserved. Customer 40
39 Thank You! Contact information: Manthan Peshne PLC NA GTM Lead / PLM Solution Architect SAP America Hillview Ave, Palo Alto, CA Manthan.peshne@sap.com Vijendran Sundararajan Solution Manager SAP for Industrial Machinery & Components SAP America (Chicago) vijendran.sundararajan@sap.com 2015 SAP SE or an SAP affiliate company. All rights reserved.
40 Legal Disclaimer The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the permission of SAP. This presentation is not subject to your license agreement or any other service or subscription agreement with SAP. SAP has no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release any functionality mentioned therein. This document, or any related presentation and SAP's strategy and possible future developments, products and or platforms directions and functionality are all subject to change and may be changed by SAP at any time for any reason without notice. The information in this document is not a commitment, promise or legal obligation to deliver any material, code or functionality. This document is provided without a warranty of any kind, either express or implied, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This document is for informational purposes and may not be incorporated into a contract. SAP assumes no responsibility for errors or omissions in this document, except if such damages were caused by SAP s willful misconduct or gross negligence. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates, and they should not be relied upon in making purchasing decisions SAP SE or an SAP affiliate company. All rights reserved. Customer 42
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