Automotive Product Cost Reduction | Siemens

Learn how Grammer achieves product cost reduction through product cost reduction and calculation of costs by using Siemens technology!

Achieving the desired profit margin on each product to be sold is determined by setting the appropriate price for the market and is heavily dependent on knowing the costs for the product.

It is surprising how big the deficits are in this area for many automotive suppliers: It requires often time-consuming activities to identify all the costs and to provide a quotation, additionally the information on costs often is not accurate. One reason for inaccurate costs is multiple interfaces through which the calculation needs to run, e.g. when several international subsidiaries are involved in the process. It is also often not transparent enough, which criteria and which approaches the procedure are used within the individual stages of the calculation process.

To address this common problem, the cost calculation process itself must be standardized and made more efficient and transparent to allow greater confidence in cost projections and profit margin targets.

Grammer, specialized in the development and production of components and systems for automotive interiors as well as driver and passenger seats for commercial vehicles, is able to achieve high accuracy in costs quotations which increase competitiveness ultimately lead to winning contracts and economic success for the subsequent products. Grammer achieves a reduction of 50% in the time to generate a quote and up to 15% cost savings in the quotation process on certain projects with suppliers.

“With Teamcenter Product Cost Management, we have implemented our strategic approach, including our functions across the entire value chain, from acquisition through to series production, merged in the calculation process and represented in a common global system landscape. Thus, we ensure a stable, transparent, and consistent global standard within the Grammer Group.” Josef Trettenbach, Vice President Controlling, Accounting and Purchasing at Grammer.

Interested in more customer stories? Check out other product costing articles.

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This article first appeared on the Siemens Digital Industries Software blog at https://blogs.sw.siemens.com/teamcenter/automotive-product-cost-reduction-siemens/