Resilient value chain in discrete manufacturing

Costing is a very important part of the entire value chain within a company. Accurate costing enables companies to determine the actual cost of manufacturing products or components.

In the sales process, companies often prepare quotations that include estimated manufacturing costs, and accurate preliminary costing is crucial to ensure realistic prices and profits. Running costings monitor cost trends during the manufacturing process to keep budget and costs under control. A final costing is carried out after the project is completed to compare actual costs with planned costs and assess efficiency.

Preliminary costing involves estimating the cost of manufacturing a particular product, assembly or batch of products before the actual manufacturing process begins. It is an important step in the planning and preparation of manufacturing orders and projects and allows companies to analyse and plan potential costs in advance.

Here are the main components of a preliminary cost estimate in manufacturing:

• Material costs: These include the estimated costs of all materials required to manufacture the product, including raw materials, semi-finished products, components and consumables. Material costs can be based on current market prices, supplier quotations or internal standard costs.
• Labour costs: This includes the estimated cost of the working time required to manufacture the product. It includes direct working hours of employees involved in production as well as possible indirect labour costs such as overtime, bonuses and social benefits.
• Machinery and equipment costs: These include the estimated costs of using machinery, tools and equipment during the manufacturing process. These can include depreciation costs for machines, maintenance costs, energy costs and other operating expenses.
• Overheads: These are indirect costs that are associated with the production of the product but cannot be directly allocated to material or labour costs. These include rental costs for production facilities, storage costs, administration costs and other operating expenses.
• Other costs: This includes all other estimated costs associated with the manufacture of the product, such as transport costs, packaging costs, customs duties and taxes.

Thorough preliminary costing enables companies to analyse and understand the total cost of a manufacturing order or project before investing resources. This helps in setting sales prices, assessing the profitability of orders and the efficient utilisation of resources during the manufacturing process.

Simultaneous costing is an instrument for ongoing cost control and analysis during the manufacture or production of components. In contrast to preliminary costing, which is carried out in advance, simultaneous costing enables continuous monitoring of actual costs compared to planned costs.

The running cost estimate in production typically includes the following elements:

• Ongoing recording of costs: The ongoing recording of costs for materials, labour, machinery and equipment as well as overheads throughout the entire production process.
• Real-time analysis of costs: Continuous analysis and evaluation of recorded costs to identify potential deviations from planned costs.
• Continuous adjustment of budgets: The adjustment of budgets and cost forecasts based on current cost trends and performance data.
• Recognising deviations at an early stage: Recognising cost variances in good time enables immediate countermeasures to be taken to keep costs in check and ensure profitability.
• Improving cost control: Ongoing costing helps to improve cost control and continuously optimise the efficiency of the production process.

The aim of concurrent costing is to enable more accurate and timely cost control, allowing companies to react more quickly to problems, identify cost overruns and make appropriate decisions to optimise production. This helps to improve profitability and increase the efficiency of manufacturing processes.

Post-costing involves analysing the actual costs of a completed project or production order compared to the originally estimated or planned costs. It is usually carried out after the production process has been completed and is used to assess the actual performance and profitability of the product or project and to improve future calculations and planning.

Here are the main components of a post-calculation in production:

• Actual material costs: The actual costs of the materials used to manufacture the product. This includes the actual consumption of raw materials, semi-finished products, components and consumables based on actual quantities and prices.
• Actual labour costs: The actual cost of the working time spent to manufacture the product. This includes the actual hours worked by employees as well as the associated wage and salary costs, overtime costs and social benefits.
• Actual machine and equipment costs: The actual costs of using machines, tools and equipment during the production process. This includes maintenance costs, energy costs, repair costs and other operating expenses related to the machinery.
• Actual overheads: The actual indirect costs associated with the production of the product that cannot be directly allocated to material or labour costs. These include rental costs for production facilities, storage costs, administration costs and other operating expenses.
• Variance analysis: An analysis of the differences between planned and actual costs to determine whether and why cost variances have occurred. This helps to identify potential problems or inefficient processes and to develop measures to improve cost control.

Post-calculation is therefore an important tool for controlling costs and continuously improving the efficiency and profitability of production processes, learning from past experience and optimising future calculations and planning.

A "growing bill of materials" is a concept specific to mechanical or plant engineering that indicates that the list of required components or parts will change or become more accurate over time. Unlike a static BOM, which contains a fixed list of components required to complete a machine, device or system, a growing BOM can accommodate changes and additions during the development process.

In mechanical and plant engineering, complex products are manufactured that consist of many individual parts and assemblies. A conventional bill of materials normally describes the compilation of all parts required for the manufacture of a product. A "washing parts list", on the other hand, makes it possible to make changes or adjustments to the production process without having to recreate the entire parts list. For a quotation in sales, the calculation references similar or existing assemblies that change during the production of a system or machine. This approach means that long-running components can be organised at an early stage for timely provision via purchasing.

Managing a growing BOM requires effective communication and collaboration between the different areas involved in the development process. This can include the use of project management and PLM (Product Lifecycle Management) software to track changes, manage documentation and ensure that all stakeholders have access to the latest version of the BOM.

In this context, the issue of versioning plays an important role.

A manufacturing company usually uses a product configurator and variant management when it offers a wide range of products that are either available in different variants or can be manufactured according to the customer's individual requirements. These tools are used to increase the effectiveness of production and at the same time fulfil the needs of customers.

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Ein Produktkonfigurator kommt ins Spiel, wenn Kunden die Möglichkeit haben sollen, die Produkte nach ihren eigenen Wünschen anzupassen. Dies ist besonders relevant in Branchen, in denen maßgeschneiderte Lösungen gefragt sind, wie beispielsweise Maschinen-, Fahrzeugbau oder Apparatebau. Kunden können mithilfe des Konfigurators bestimmte Merkmale oder Optionen wählen, um ihre Produkte individuell anzupassen, ohne dass eine aufwändige manuelle Konfiguration erforderlich ist. Dies steigert nicht nur die Zufriedenheit der Kunden, sondern auch die Effizienz des Unternehmens im Vertrieb, da die Produktanpassung automatisiert und standardisiert wird.

Variantenmanagement hingegen ist von Bedeutung, wenn ein Unternehmen eine Vielzahl von Produktvarianten anbietet. In solchen Szenarien ist es wichtig, die Komplexität im Produktportfolio zu reduzieren und gleichzeitig die Effizienz der Produktion zu maximieren. Durch eine effektive Verwaltung und Organisation der Produktvarianten können ähnliche Varianten konsolidiert, Lagerbestände optimiert und Produktionsprozesse vereinfacht werden. Dies ermöglicht es dem Unternehmen, flexibel auf die Nachfrage zu reagieren und gleichzeitig die Kosten zu senken.

In summary, product configurators and variant management are used in manufacturing companies to increase effectiveness by enabling customisation of products while reducing complexity in the product portfolio. This helps to increase customer satisfaction, strengthen the company's competitiveness and optimise production processes.

In a project-orientated environment such as mechanical or plant engineering, growing parts lists, constant changes throughout the process and tight schedules are of crucial importance. Particular attention is paid to the procurement and timely monitoring of long lead times and early planning of products.

The reason for this is obvious: optimised procurement planning for long-running parts is crucial in order to guarantee and maintain the shortest possible product delivery times. For planners, this means that procurement must be initiated even before the design has been finalised and, for example, parts lists for assemblies have been approved for purchasing.

In addition, long-runners are usually characterised by the fact that they can only be kept in stock in limited quantities or not at all due to their considerable value or their customer-specific design. In this case, tying up capital in stock would be uneconomical.

Efficient procurement planning for long-running products is therefore essential to ensure that tight product delivery deadlines are met.

Close co-operation between design and purchasing is therefore essential and requires careful coordination.

External production" and "extended workbench" are two terms that are often used in connection with manufacturing, especially when it comes to the organisation of production processes. As a rule, there is close and continuous co-operation with the purchasing and production departments of companies.

Third-party manufacturing refers to the outsourcing of parts of the production process to external partners or contractors. Companies opt for external production for various reasons, such as capacity bottlenecks, specialisation of certain suppliers, cost considerations or to be able to react more flexibly to market requirements. Typical examples of outsourced processes include the manufacture of assemblies, components or even entire products by external companies.

The extended workbench is a concept in which a company outsources certain production steps or processes to external partners, but integrates them closely into its own production process. The idea is that the outsourced processes fit seamlessly into the company's internal production flow and effectively act as an "extension" of its own workbench. This can help to avoid bottlenecks, buy in specialised skills externally and at the same time retain control over the entire production process.

In both cases, the aim is to make production more efficient by delegating certain tasks or processes to external partners. While outsourcing often refers to the outsourcing of entire production tasks, the extended workbench usually involves closer co-operation between the main company and the external partners to ensure a smooth production process

The topic of field service and after sales has become increasingly important in recent years in order to further expand the value chain of companies in discrete manufacturing.

Effective field service and after sales support enables companies to build strong customer loyalty by assisting customers with the installation, maintenance and repair of products. By responding quickly and efficiently to customer enquiries and problems, companies can increase customer satisfaction and build long-term customer relationships.

In many industries, competition is becoming more intense and companies are looking for ways to differentiate themselves from their competitors. Excellent field service and after sales support can become a key differentiating factor in persuading customers to choose a particular company or product.

Through regular maintenance and repair, companies can extend the service life of their products and maximise their performance. This helps customers to better utilise their investment in the products and avoids costly downtime or production interruptions.

The after-sales sector offers companies the opportunity to generate additional revenue by offering services such as maintenance contracts, training, spare parts and accessories. These additional revenues can make a significant contribution to a company's overall turnover.

Field service technicians have direct contact with customers and receive valuable feedback on a company's products and services. This feedback can be used to improve products, better understand customer needs and drive innovation.