Accurate Quotation Costing Secures Automotive Suppliers Success

The complexity of quotation costing, coupled with time and resource constraints, lead to difficulties for sales engineering teams to provide timely responses to participate in new projects. These teams must collaborate with internal cost engineering teams, procurement, development and production teams to identify the most cost-efficient way to deliver the required capabilities – at a certain volume and within a certain time frame. Meeting the proposal deadline in this complex and fast-paced environment often leads to cutting corners and making assumptions that kill profitability over the life of a project.

For automotive suppliers, the quotation phase is commercially very important. In other industries, sales teams have leeway to cut corners, as less concern is given to long-term feasibility and the focus is on producing a winning competitive bid. However, automotive suppliers require added due diligence during the quotation phase. Relatively high-volume production run and long-duration projects allow small quotation errors to amplify over the life of a product, completely eroding profit margins. In other words, quotes in the automotive industry must be highly accurate. Therefore, cost estimators and other decision-makers need accurate information for decision-making and they need this information earlier than later.  

Excel or database solution?

The company’s requirements for quotation costing are usually specific, complex and highly variable. In practice, however, there are often decisive shortcomings. Departments involved in the costing process still use disconnected spreadsheets. The substantial disadvantages of spreadsheet solutions are obvious: 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 negotiated agreements with customers and suppliers.

With Teamcenter Product Costing supporting the quotation costing, all relevant variables determining the costs and product profitability as well as the company’s strategic objectives are taken into consideration. Teamcenter Product Costing is a standardized and cross-functional solution for all stakeholders involved in the quotation process such as sales, cost engineering, procurement, production, development, finance, etc. The cost data is collected, edited, processed and presented on a single platform and this ensures that all employees have the same valid data to base their cost calculations on. Teamcenter Product Costing supports you in optimizing your quotation process by:

• Better justification of product cost and assertion of profitable sales prices
• Shift from a reactive to a proactive approach in open-book accounting
• Supplier’s negotiating position is strengthened in cost negotiations with customers

Read more on Quotation Costing with Teamcenter Product Costing.