SAP Product Lifecycle Costing Calculating Costs of New Products powered by SAP HANA

Transcription

1 SAP Product Lifecycle Costing Calculating Costs of New Products powered by SAP HANA Solution Management, SAP SE October 2017

2 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. 2

3 Agenda 1 Challenges in early costing Challenges, use cases, and industry relevance 2 Co-innovation a joint approach Design thinking and co-innovation with our customers 3 SAP Product Lifecycle Costing Key capabilities and live demo 4 Summary and road map 3

4 Challenges in early costing Challenges, use cases, and industry relevance

5 The Challenge Today Excel Excel or SAP ERP Project lead Engineering Manufacturing engineer Microsoft Excel and legacy tools used for early cost estimates and planning but SAP ERP for actual cost calculation Sales X Product manager Excel Others EBoM* Excel PLM BoM Controlling SAP ERP Sales Y Procurement * EBoM = engineering bill of materials: 5

6 AGCO says we are further challenged by diverse business process, data and system landscape due to our growth by acquisition HES BIS: CRTo: JAX BIS: CRTo: CAN BIS: CRTo: MOG BIS: CRTo: BVS BIS: CRTo: LIN BIS: CRTo: MOD BIS: CRTo: GRV BIS: CRTo: SUO BIS: CRTo: BRE BIS: CRTo: China BIS: CRTo: making product costing challenging with designs, sourcing and manufacturing being performed across multiple sites for the same product. Source: Integrated Cost Management with SAP Product Lifecycle Costing, Christian Klingler at SAP PLM InfoDay 2017, June

7 Design end Engineering Dilemma: The 80 / 20 rule Cost Time window for cost optimization 80% of the product cost are determined during the design stage. 100% Cost Determination One of the last, untapped cost optimization potentials resides in the early costing process Entry Product Life Time Cost-Reduction Opportunities 7

8 We want to reduce product costs We believe our greatest chance is early in the design cycle Source: Integrated Cost Management with SAP Product Lifecycle Costing, Christian Klingler at SAP PLM InfoDay 2017, June

9 but, today cost confidence follows our BOM maturity New product idea Concept Review Project Approval Design Release OK to produce SOP 80% 100% 20% Source: Integrated Cost Management with SAP Product Lifecycle Costing, Christian Klingler at SAP PLM InfoDay 2017 June Estimated Cost We want Cost Confidence to outpace BOM maturity Actual Cost 100% BOM maturity Cost confidence 9

10 Product maturity Challenges in early costing Co-innovation a joint approach SAP Product Lifecycle Costing Summary and road map Focus use cases for product costing Concept acquisition Product or process development Production ramp-up Start of production MOVE Production DISPOSE Disposal Preliminary cost estimate (new product introduction [NPI] or continuous improvement [CI] Inventory valuation (SAP ERP today) Production cost simulation Quotation costing Lifecycle costing Engineering or design bill of materials Manufacturing bill of materials Unstructured data Structured data and values available, such as material, bill of materials, routing, and pricing information Time 10

11 Primary Focus Industries Automotive Automotive Suppliers (Brose, Mahle) Automotive OEMs (AGCO, Daimler, Caterpillar) Mill Products Metall companies producing metal products supply automotive (PWO) Industrial machinery and components Component manufacturer (Endress&Hauser) Project manufacturer (Bühler) Engineering project Manufacturer (KSB) Aerospace and defense Aerospace contract manufacturer OEMs High Tech Contract and Component Manufacturer Business and Consumer OEMs Semiconductor CP / Pharma / Chem Consumer Products (Hersheys, Marathon Cheese) Pharma (Roche) Chem (BASF) 11

12 Co-innovation with our customers

13 Design thinking co-innovation with ASUG and DSAG customers 13

14 30+ Customers work and have worked with us 14

15 Typcial Customer Implementations - Global Product Costing at. Automotive Global Player, OEM, Use Case Costing of new Products Challenge: 11 different sites with own calculation sheets in Excel and own costing rules Solution today: One standardized Process, One Database, efficiency gain 3% Early adopter High tech Company, Use Case Costing of New Products Challenge: Replacement of multiple software tools with a single solution. Solution Today: Standardization of calculations throughout the group companies comparability and traceability across all companies by using one database, same cost component structures, same data processing rules SME Automotive Supplier, Use Case Cost 2 Quote for new products Challenge: 4 sites with own excel spread sheets, different costing sheets, no integration into ERP - Thin margins, high production cost Solution Today: One global costing process, single instance, ERP integrated Global IM&C Company producing Food processing machines Challenge: Costing was done with several legacy tools across multiple sites Solution Today: Now ONE process, ONE tool, ONE database 15

16 Improving Product Cost Accuracy and Profit Margins with SAP Product Lifecycle Costing Company Global leading Agriculture OEM Company Products and Services: Farming, harvesting, and tractor equipment Employees: 20,000 Revenue: US$10.79 billion (2013) Situation: Company is using Excel spreadsheets across multiple sites to calculate their OEM products. Integration in Design, Purchasing and ERP was not available. Comparison of series costs with new product costs not possible. Solution SAP Product Lifecycle Costing solution integrated with different enterprise resource planning (ERP) systems and databases for one flexible and open tool Flexible solution with a user-friendly interface that is available at multiple sites a key advantage for AGCO Established an interface with PTC Windchill in order to leverage engineering data early in the process Process Innovation Harmonize processes and ensure consistency with a common costing tool Increase accuracy through global system accessibility Combining multiple sources (multiple ERP, PDM, and other data sources) into one global costing management tool Increase transparency through integrated reporting & analysis Improve local content rates to gain further cost efficiencies through managing this KPI better Cross-country user collaboration, saving significant time and effort Benefits 3 % expected reduction in product cost estimates Improved target cost achievement Greater efficiency, allowing cost engineers to focus on value-add design and product development Higher win rate through improved costing process cycle time 16

17 Innovate and perform in changing business environments with SAP Product Lifecycle Costing Company Global leading medical devices company Employees; xx Revenue: USD Situation: Company is constantly designing new products and experienced challenges around product cost management of new products. Solution SAP Product Lifecycle Costing integrated to SAP ERP on HANA Process Innovation Retirement of error-prone and highly manual legacy tools and partner application Direct integration to design BOM authored in CAD design tools and managed in SAP PLM Re-use of SAP ERP master data Full traceability of performance of design, manufacturing and supply optimization steps towards target cost Ability to innovate and perform in changing business environments Benefits Accurately calculate against target cost Reduced product and development costs Reduced time-to-market Increased product profitability 17

18 Enhancing Sales with Better Quote Costing Using SAP Product Lifecycle Costing Company Family-owned Swiss company operates in 140 countries. Products and Services: Solution provider for food-processing, dye-casting, and surface-coating technologies Employees: 10,640 Revenue: CHF 2.54 billion ( 2.33 billion) Situation: Company is constantly designing new products and experienced challenges around product cost management of new products. Solution SAP Product Lifecycle Costing integrated to quotation system and SAP ERP application Process Innovation Improved accuracy of costs for complex, customer-specific machines and solutions based on various factors in the quotation stage of a sale Calculation of flexible structures aligned with the latest manufacturing bills of materials and routings Validation cockpit and mass update capabilities to automatically handle multiple recalculations and yearly calculation updates One global tool and harmonized quote and costing process Benefits Greater cost accuracy Faster processing and response times Intuitive user experience Lower risk of profit loss 18

19 Better quote win rate through accurate product costs using SAP Product Lifecycle Costing Company Global leading manufacturers of pumps and valves, providing a comprehensive range of service offerings. Production and assembly sites in 16 countries. Global sales and service network for 100+ countries. Employees 16,196 Sales revenue 2,334.8 million Situation: Different pre-calculation structures, processes, and systems across the KSB Group. Limited comparability. Lack of traceability. Process Innovation Replacement of existing tools by a single tool. Standardization of the group pre-calculation Using same database, calculation scheme, data processing rules, and output structure, therewith comparability of all companies globally Starting with quotation costing of Engineer-to-Order products, followed by cost calculation of casting materials and standard products. Solution SAP Product Lifecycle Costing Integration in S/4 HANA SAP Business Intelligence for Analytics Benefits Eliminated mistakes Comparability and traceability of product costs Reduced processing times, faster response time Increased Quote win rate 19

20 SAP Product Lifecycle Costing

21 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 Microsoft Excel like UI Open SAP ERP, Microsoft Excel, and SAP PLM Flexible Cost structure First-class user experience High performance Integration with SAP ERP 21

22 Cost estimation in SAP Product Lifecycle Costing Costing structure Prices Calculation Simulation Import the costing structure from SAP ERP, Excel or any other data source such as PTC Windchill or others, or manually create the costing structure 1 3 Calculate and save a first cost estimate as initial basis Automatically determine material and activity prices according to a defined price determination strategy, with SAP ERP, other source or locally maintained prices, or manually set prices in a calculation 2 4 Simulate cost estimates and create further versions with more detailed and up to date price information 23

23 Key Features Calculation Structures Calculations Versions Reference Calculations ERP/Excel Import Calculation Master Data Material Cost Center, Work Places, Processes SAP ERP & S/4HANA Integration Valuation Data Prices, Tarifs Costing Sheets Currencies Units of Measure User Support Mass Change Highlighting Layout Search Projects Project Master Data Lifetimes Surcharges Analytics Self Service Analytics Managed Analytics Management Reporting KPI Analysis Extensibility Custom Fields / Formulas Integration to other Application Templates API / Add In Framework Authorization / Data Security User Management Security Engineering Locking Single Sign On 25

24 High-level overview Collaboration Integration with collaboration solutions Internal and external communication User interface Calculation user interface Extensible master, project, and costing structure maintenance Preliminary costing Quotation costing Functions Calculation versioning Simulation Analysis Visualization Calculation engine Lifecycle costing Material master Prices Costing sheet Material BoMs Document structures Source and target data Purchase agreement or info record prices Existing calculations Order BoMs Work breakdown structure Other sources and targets and Microsoft Excel Planned Activity types, rates, and cost centers Costing structure templates Routings Product structure management 27

25 Main views Administration Maintain and manage all master data and settings in one conveniently structured view Cockpit Manage your projects, calculations and calculation versions and history centrally My Home Access your last used calculation versions with one click Project Manage your costing project details Calculation Create your costing structure from SAP ERP, SAP PLM, Excel, or other data sources, or manually from scratch, and analyze the cost breakdown 28

26 Project object for grouping multiple calculations Projects are used to organize calculations and versions Enables reporting on defined sope of calculations Projects can refer to an SAP ERP PS or SAP PPM project Provides project attribute inheritance to new calculations and versions Foundation for lifetime reporting and simulation 29

27 Different ways of creating a costing structure 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. Microsoft Excel SAP Product Lifecycle Costing is integrated into the entire SAP solution landscape. Therefore, existing document structures, bills of materials, and related routings can be imported from SAP ERP to create new calculations. SAP ERP Of course, it is possible to create a structure from scratch. SAP Product Lifecycle Costing simplifies that approach as well. Manual 2017 SAP SE or an SAP affiliate company. All rights reserved. 30

28 Different ways of determining item prices Prices for all items can be determined by using the local master data. Local SAP Product Lifecycle Costing can be integrated into your SAP solution landscape. Material and activity prices can be easily determined by getting data from SAP ERP. SAP ERP A user can also manually maintain calculation-specific prices for each item in the costing structure. Calculation specific 2017 SAP SE or an SAP affiliate company. All rights reserved. 31

29 Price Determination Strategy Highlights Price Determination Access Sequence: 1. Maintain different Price Sources, such as estimated price, ERP Price, Project Price, Vendor Price 2. Determine the price determination sequence 3. Associate a confidence level with it The system is determining the price based on the price determination strategy and applies the appropriate price in the calculation 32

30 Lifetime Cost Calculations Planned demand/production volumes are applied to base calculations to determine total product cost over the product lifecycle 33

31 references Challenges in early costing Co-innovation a joint approach SAP Product Lifecycle Costing Summary and road map Reference calculations used for cost estimate modularization and re-use Cost Estimate with 1 Referenced Version 34

32 Different ways of calculating and analyzing costs Within a calculation, you can choose which existing cost component split or costing sheet should be used to calculate or to break down the costs. 36

33 Additional analysis options examples Fixed and variable costs per cost component and resource Version comparison SAP BusinessObjects Analysis for Microsoft Office SAP BusinessObjects Lumira 37

34 Extensibility options Open SAP Product Lifecycle Costing for extensions by customers and partners to address custom use cases and enable integration with third-party systems while helping to ensure data integrity and security. There are four technical options to extend SAP PLC and integrate with external applications. Each option has different capabilities and enables different use cases. Back-end API Standard or custom SAP HANA views Custom fields and formulas Front-end add-in framework 38

35 Flexibly adaptable to your needs custom fields & formulas example Custom fields allow you to tailor the data that is used to fit your organization s needs. You can: Create custom fields on master data level Inclusion and local override on calculation version item level Create custom fields for calculation versions on item level allowing to Enter a manual value Get a value calculated by a formula Define if a value should be rolled up Define for which item categories the custom field (and its formula) is to be available, and in which group in the item details it should be displayed Maximum of 150 custom fields 39

36 Flexibly adaptable to your needs ribbon bar add-in example Templates: Create multiple cost items based on a few custom data entries, e.g. auto-create 3 items for setup/machine/labor from a template. 40

37 Flexibly adaptable to your needs side panel add-in examples Visualization Display of thumbnails of the product or component selected in the costing structure in the side panel (for example, from the document management system component in SAP Product Lifecycle Management or the SAP 3D Visual Enterprise application) Cross departmental boundaries Leverage social media platforms embedded into the solution for collaboration, like SAP Jam 41

38 Flexibly adaptable to your needs integration across applications R&D optimize product design cost Integration of SAP Product Lifecycle Costing with SAP Engineering Control Center (single repository for product data generated out of different engineering authoring tools) Hannover Fair 2016 video Transfer to SAP Product Lifecycle Costing Fetch total cost from SAP Product Lifecycle Costing Total cost from SAP Product Lifecycle Costing shown here Sales optimize quotation costing Integration of SAP Product Lifecycle Costing with SAP Hybris Commerce, cloud edition (cost calculation of the customer-specific parts and assemblies in SAP Product Lifecycle Costing and transfer of the cost into the quotation) 42

39 High-level architecture SAP ERP Expert front end Microsoft Excel Optional Communication or validation Data query or processing API Legacy system Optional Any database Replicated SAP ERP master data Local master data or calculations Optional SAP HANA 43

40 Live Demo

41 Summary and Road Map

42 SAP Product Lifecycle Costing offers First-class user experience High performance Integration with SAP ERP und SAP S/4HANA Extensibility made for customers 46

43 SAP Product Lifecycle Costing offers Straightforward integration with SAP and third-party applications High performance Extensibility that is made for customers and is easy to apply First-class user experience 47

44 What our customers and partners are saying We recently decided to use SAP Product Lifecycle Costing to calculate and analyze new products at our company in future. With the power of SAP Product Lifecycle Costing, we strive to reduce development costs and improve product margins. With the SAP team supporting us in a unique manner, their team spirit, and the continuous co-innovation with the team of 10 co-innovation customers, we have already made a huge step forward in learning from other organizations. Phillip Feger, Program Manager PLC, Progress-Werk Oberkirch AG SAP Product Lifecycle Costing is a new application running on SAP HANA, which now empowers our customers to really calculate their costs for new products in the new-product development and introduction phase. We are closely working and co-innovating with SAP in this area, and we are impressed about the solution capabilities so far. The uniqueness of the product is the adaptability, UI, performance, and the integration into [SAP] ERP. Bernd Schroeder, Associated Partner, MHP A Porsche Company 48

45 Product road map overview - key themes and capabilities Today Planned Innovations Future Direction Create/Edit calculations Import calculations from ERP/Excel Reference calculations Manage projects, calculations, versions Project lifetime Create/Edit local master data Replicate/Import master data Automatic price determination Custom price sources Calculation and roll-up Target costing Analytics for calculation version Analytics with external tools HANA views for projects, calculations, versions Custom fields&formulas in calculations Custom fields in master data Frontend Add-in framework Backend API for system integration General access restrictions & instance-based privileges Mass Change & Filter Time-dependent surcharges Work Centers Status Management Variant Matrix Usability improvements Performance improvements Add-in Framework extensions Backend API extensions Export calculations to Excel Integration with other SAP solutions Collaboration workflow support Import master data from Excel Export master data to Excel Advanced Intercompany Validation and consistency checks Advanced target costing Advanced variant handling Advanced analytics for calculations KPI dashboards Advanced simulation in projects Version comparisons This is the current state of planning and may be changed by SAP at any time. 49

46 Further Information SAP Cloud Appliance Library (CAL) Overview Video SAP Web Site Solution in Detail Brochure Help Portal 50

47 Thank you SAP Solution Management Petra Köpfer-Behncke Marion Heidenreich (IM&C) Ulf Petzel (high tech) Manivel Kulanthaivel (automotive) Carsten Hilker (finance) SAP Development Jochen Rode Daniela Wünsch SAP Custom Development Manthan Peshne (Palo Alto) Rüdiger Müller (Walldorf)