It’s hard to keep up with Siemens’ pace of buying companies. Three announcements of intent to purchase three different companies in three months. Recently, Dora Smith interviewed Siemens PLM CEO Chuck Grindstaff and asked him about merging cultures. Great interview and worth your time.
It’s time to take a step back and look at the first of the acquisitions we announced in September, Perfect Costing Solutions (PCS). I sat down with Rohit Tangri, Head of Product Management & Marketing within our Lifecycle Collaboration Software group to get a little insight on how PCS fits into Siemens PLM Software.
Susan: Can you explain who is Perfect Costing Solutions (PCS)?
Rohit: Perfect Costing Solutions GmbH is a provider of Product Cost Management solutions, headquartered in Göppingen, Germany. Their primary focus is on providing solutions for product cost calculation, methods and estimation tools for the discrete manufacturing industry.
Susan: What does PCS add to the Teamcenter portfolio?
Rohit: By integrating product cost estimation and analysis within the Teamcenter portfolio, we can offer our customers the tools to makesmarter and profitable costing decisions early in the product lifecycle. Instead of relying on traditional methods for cost analysis based after the fact, they can use the same product lifecycle management (PLM) system they use to manage product development to predict and control product costs using data such as Geometry, Materials selection, part volumes, assembly and product definitions.
Susan: Why did we decide to acquire Perfect Costing Solutions for our costing capabilities rather than one of their competitors or just building something ourselves?
Rohit: We found the ideal combination of domain expertise, software products and reusable knowledge databases and content in PCS. With an established presence and customer base compatible with ours. The product costing market is significant in the applications space and dominated today by the use of spreadsheet tools. As outlined in recent analyst reports and studies from McKinsey and MIT Sloan school, with the increasing customer demand to hit new product introduction (NPI) product profitability targets, we see ourselves as having first mover advantage in PLM to provide our customers the ability to estimate product costs early in the product lifecycle.
Susan: For our existing Teamcenter customers, what will they be able to do with Teamcenter Product Cost Management that they couldn’t do before and what benefits will they realize?
Rohit: Our customers can now use PCS tools to model and simulate product costs, make smarter decisions to hit key product profitability targets for their NPI programs. By implementing a process for product cost estimation early in the product lifecycle, they can reduce cost for existing products and programs and obtain immediate ROI.In due course, integrated with our Teamcenter and extended solutions portfolio they would be able to drive improved margins and profitability with our suite of HD-PLM offerings.
Note: There is a new HD-PLM video that is worth the time to watch. This video clearly explains Siemens PLM vision and the three pillars that support it: Intelligently Integrated Information, Future-Proof Architecture and high-definition user experience.
Susan: PCS has been very focused on the automotive industry. Will we broaden this focus to include other industries? If so, which are most likely to receive the biggest value?
Rohit: Any company in the discrete manufacturing industry can benefit from accurate product costing and estimation tools to predict and control product costs from the very beginning of the product lifecycle. Perfect Costing Solutions has mostly focused on the markets in Germany and EMEA to date. With our extensive sales presence worldwide, we expect to add momentum to these marketsand significantly extend momentum in the US and later in the AP markets across all of our key markets.
For more information be sure to take a moment and read the Teamcenter Product Cost Management fact sheet. Here’s a quick, tweetable stat for all you number-types:
According to a DARPA study, 80% of a product’s costs are determined in the first 20% of the lifecycle. If you’re relying on enterprise resource planning (ERP) for cost analysis, it’s too late.
Does your company do cost estimation upfront in the product lifecycle? If so, how is it done? Leave a comment, we’d like to hear from you.