SAP Product Lifecycle Costing · Microsoft Excel and legacy tools used for early cost estimates and planning but SAP ERP for actual cost calculation In today’s fast-evolving market,

INTERNAL

Petra Koepfer-Behncke, Solution Management, SAP SE

November 2018

SAP Product Lifecycle Costing SBN Web Session – SAP Product Lifecycle Costing 3.0

2CUSTOMER© 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ

1. Challenges in early costingChallenges, use cases, and industry relevance

2. SAP Product Lifecycle CostingCo-Innovation & Key capabilities

3. What ´s New in 3.0

4. Live Demo

5. Roadmap – Demo Options & Key Assets

Agenda


Challenges in early costing SAP Product Lifecycle Costing What’s New in 3.0 Roadmap & Key Assets

Challenges in early costing

01

Challenges, use cases & industry relevance



Microsoft Excel and legacy tools

used for early cost estimates and

planning but SAP ERP for actual

cost calculation

In today’s fast-evolving market, companies are facing increasing pressure to provide innovative, customer-driven products

and quotations at competitive prices. Lack of visibility into early product cost hurts profitability downstream. TODAY

customers are using Excel spreadsheets to calculate future product costs

The Challenge Today



“We are further challenged by diverse business processes, data and system landscapes due to our

growth by acquisition…

Why Use SAP Product Lifecycle Costing?SAP PLC reference customer AGCO says…

…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 22-23

ERP System

Costing Tool

ERP System

Costing Tool

ERP System

Costing Tool ERP System

Costing Tool

ERP System

Costing Tool

ERP System

Costing Tool

ERP System

Costing Tool



Innovation Curve

€

eBOM

mBOM

Plant 1

Plant 2

Prototyping

Tooling

SAP Product

Lifecycle CostingDesign to cost impact

Start of Production

Concept

Requirements

Product

Design BOMMBOM/

Sourcing

Prototype

Tool Planning Scale Up

Handover

SAP Product

Lifecycle Costing

SAP Product

Lifecycle Costing

SAP Product

Lifecycle Costing

!

!

As built

mBOMPlant 1

Plant 2

!

Ramp Up

Cost of Design Changes

!

80% of the product cost are determined during the

design stage.

One of the last, untapped cost optimization

potentials resides in the early costing process



SAP Product Lifecycle

Costing

02



Focus use cases for product costing

MOVE DISPOSE

Concept

acquisitionProduction

ramp-upProduction

Start of production

Disposal

Production cost simulation

Engineering or design bill of materials Manufacturing bill of materials

Unstructured data

Pro

duct

matu

rity

Structured data and values available, such as material, bill of materials,

routing, and pricing information

Time

Product or process

development

Inventory valuation (SAP ERP today)Preliminary cost estimate

(new product introduction [NPI] or continuous improvement [CI]

Quotation costing

Lifecycle costing

Concept

acquisitionProduction

ramp-upProduction Disposal

Product or process

development



From Design Thinking Co-Innovation….

…and an initial draft on paper...

…over a first full mockup…

…to a completely developed solution.

01

Design thinking co-innovation with ASUG and DSAG

customers

02

03

04



High Tech • Contract and Component

Manufacturer• Business and Consumer OEMs

Semiconductor• Medical devices

Industrial machinery and components • Component manufacturer • Project manufacturer • Engineering project Manufacturer

Primary Focus Industries

Aerospace and defense• Aerospace contract manufacturer• OEMs

Mill Products• Metal companies producing metal

products supply automotive

CP / Pharma / Chem• Consumer Products • Pharma • Chem

Automotive• Automotive Suppliers• Automotive OEMs



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



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 HANAUser centric

Microsoft Excel–like UI

Open

SAP ERP, Microsoft

Excel, and SAP PLM

Flexible

Cost structure

First-class user experience Integration with SAP ERPHigh performance

http://www.slideshare.net/sap/the-future-of-networks

http://www.slideshare.net/sap/the-future-of-customer-experience-29818984

http://www.slideshare.net/sap/the-future-of-resource-optimization-amid-increasing-scarcity

http://www.slideshare.net/sap/the-future-of-work-30060347



Key Features

Calculation StructuresCalculationsVersionsReference CalculationsERP/Excel Import

Valuation DataPrices, TarifsCosting SheetsCurrenciesUnits of Measure

User SupportMass ChangeHighlightingLayoutSearch

Calculation Master DataMaterialCost Center, Work Places, ProcessesSAP ERP & S/4HANA Integration

ProjectsProject Master DataLifetimesSurcharges

ExtensibilityCustom Fields / FormulasIntegration to other Application TemplatesAPI / Add In Framework

Authorization / Data SecurityUser ManagementSecurity EngineeringLockingSingle Sign On

AnalyticsSelf Service AnalyticsManaged AnalyticsManagement ReportingKPI Analysis



Main views

CalculationCreate your costing structure from SAP ERP, SAP PLM, Excel, or other data sources, or manually from scratch, and analyze the cost breakdown

CockpitManage your projects, calculations and calculation versions and history centrally

AdministrationMaintain and manage all master data and settings in one conveniently structured view

ProjectManage your costing project details, and define lifetime calculations

My HomeAccess your last used calculation versions with one click

VariantsCreate your product variants based on a 150% maximal structure to quickly calculate product variants in one go



90%60%

75%

From Excel

From scratch or using templates

From SAP S/4 or ECC

From any other data source

How to derive a costing structure and processes



Sources of master data

1. Local Master Data 2. Replicated Master Data

Calculation Version-Specific

Master Data



© 2017 SAP SE or an SAP affiliate company. All rights reserved.

Different ways of determining item prices

Prices for all items can be determined by using the

local master data.

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.

A user can also manually maintain calculation-specific prices for each

item in the costing structure.

Local

SAP ERP

Or S/4Hana

Calculation

specific



Extensibility options

SAP Product Lifecycle Costing is open 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.

Custom fields and formulas

Standard or custom SAP HANA viewsBack-end API

Front-end add-in framework



Flexibly adaptable to your needs – side panel add-in examples

Cross departmental boundaries

Leverage social media platforms embedded into the solution for collaboration, like SAP Jam, SAP Documents, SAP DMS or other applications

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)



What’s New in 3.0

03



Efficient costing of variant mix – Flexible framework for calculating variants

User Stories

• Create a variant matrix for a calculation version

• Open, show and close a variant matrix in the “Variants” view

• Edit and calculate variants

• Save the “Variants” view

• Create a new variant in the “Variants” view (also as copy)

• Delete a variant in the “Variants” view

• (Mass-) Generate new calculation versions based on variants

• Visualize and accept changes in the variant matrix after changes to

the variant base version

Variant Matrix

Motivation / Context

• Companies in the discrete industries usually offer a variant mix

• Based on a super BOM, variants should be easily calculatable



Efficiency of data maintenance – Reusable filter based on complex scenarios

Highlights

• Filter items based on complex filter criteria, e. g. with any operators or

upper and lower limits

• Combine filter criteria for different fields or the same field

• Load / Save / Rename / Delete filters

Filter table in calculation view by any field


• Customers need to find items in a complex, deeply nested costing

structure with thousands of items

• Simple filter cannot address these complex scenarios



Flexible maintenance – Allow manual changes and mark differences to master data

Highlights

• Master data standard fields and custom fields would have the same

behavior

• Master data dependent fields can be set manually, via mass change

and via add-in

• Transparency what fields were changed manually what is the

difference to master data values.

• Resetting possible via Update Master Data

Visualize manual changes on item level for fields depending on master data


• Customer felt overruled because they could not overwrite fields

dependent on master data

• Local changes of editable fields were not visible

• In particular in Add-Ins, it was not transparent why the same fields

could sometimes be set and sometimes not

• Many bugs due to complexity, e. g. via backend API non-editable

fields could be set, work center dependencies could not be resolved

Tooltip:



Powerful overhead calculation – Use further overhead dependencies

Highlights

• Allow additional dependencies in the costing sheet overheads

• Activity Type

• Cost Center

• Work Center

• Enables detailed overhead planning for internal activities and

processes


• Indirect costs allocated via overhead calculation by the costing

sheet are differentiated in the early phase of costing based on

other attributes as the ones in the ERP standard calculation

Additional dependencies in costing sheet overheads



Integration in big ERP landscapes – Multiple ERP sources for structures

Highlights

• Allow several system configurations in the

ProductLifecycleCosting.exe.config by also specifying an alias

• When importing from an SAP ERP system a dropdown with all

system aliases is shown where the user can select one system


• Customers with big system landscapes (e.g. AGCO, Daimler) wants

to import from several ERP systems

Support import of BOM/routing/doc structure from multiple ERP systems



Powerful import into calculation versions – Additional fields in the import from MS Excel

Highlights

• Import possible of

• All editable standard fields, including prices

• All item categories (also document)

• All custom fields including UoM or currency

• Setting if formula calculated value or manual value should be used

• Validate imported values in frontend, show user-friendly error messages

Import of additional fields into a calculation version from MS Excel


• Excel Import into a calculation version did not cover the critical

required options

• Big maintenance effort because the import via add-in and via

Excel used different implementations; Mass-Import was not

possible via Add-In in previous versions



Reuse simulation scenarios – Change settings stored as a whole

Highlights

• Filter and change settings can now be saved as one configuration

• Load and save a configuration is done at the beginning of the

dialogue


Outcome of the usability test in customer workshop December 2017

• Mass change is used for simulations of scenarios

• To save complete scenarios, filter and change settings need to be

saved as one configuration

• Load and save a filter is difficult to find in V2.0 SP3

Mass change: Save filter and change of mass change as one



Cover additional scenarios – Use further operators in mass change

Highlights

• You can clear the value from a field. This is only possible for non-

mandatory fields

• You can multiply existing values by a factor, e.g. to subtract the cost

of an assembly

• You can replace part of string by another part of the string


• Outcome of usability test at customer workshop in December 2017

and feature requests of customers

• Additional requirements for operators and functions to cover also

complex scenario

Mass change: Additional operators for mass change



Efficient work with SAP PLC – Great user experience

Highlights

• Mass change can be done for all items OR only the selected item

to avoid user errors that only a subset of target items is changed

• Update references can be done for all items OR only the selected

item in a more convenient way

to avoid the user confusion that the ribbon button offers other

options as the context menu as we had it in the previous version

• Side panel can be hidden

to use the overall space on the screen


• Usability tests brought some feedbacks how to improve existing

features.

Further Usability Stories



Live Demo

04



Demo & Proof of Concept

Information

03



Demo Options – Comparison

SAP Trial Version SAP CAL SAP Model Company

Release Level Latest or previous Hot Fix Latest or previous Hot Fix Latest

PoC Viable No Yes Yes

Refresh Frequency Weekly None On demand

SLT Replication No No Yes

Flexibility Limited Full Yes

Costs Free of charge Free of charge Based on Customer PoC

*: Model Company 3.0 released end of March 2017 also includes SLT replication from S/4HANA



Roadmap & Key Assets

05



This is the current state of planning and may be changed by SAP at any time.

Recent innovations Product directionPlanned innovations Product vision

Product road map overview - key themes and capabilities

Manage calculations

▪ Reference a calculation version

▪ Layout management

▪ Mass change & filter

Advanced pricing

▪ Custom price sources

▪ Vendor-/project-/customer-specific

prices

Project lifecycle

▪ Plan quantities for next years

▪ Simulate price changes by surcharges

▪ Exchange rate types

▪ Instance-based privileges

Work center & processes

Extensibility

▪ Analysis for Office-integration

▪ Extensions to add-in framework

▪ New custom formula functions

▪ Custom fields in master data

Variant matrix

Filter table by any field

Visualize manual changes

Cloud-enablement

Folders

Public backend API

for master data services

Import/export of master data

from/to MS Excel

Archiving

Transportation tool

Price and rate components

(e.g. logistics, tax, etc.)

Public backend API

for transactional data services

Project lifecycle enhancements

Instance-based authorizations for

prices and overheads

Sophisticated price determination

Scaled prices

SLT-Replication of custom fields

Web-frontend for dedicated user roles

Measure management

Fine grained authorizations to either

edit structure or costs

Refined costing sheet capabilities

More flexible analytics based on

component split by any dimension

Adaptability of lifecycle generation

Adaptability of cockpit view

More flexible custom formulas (e.g.

enhancements by preconditions)

SLT-Replication from more than one

SAP ERP system

(Release 2.0-2.3)

▪ Extend add-in-framework

▪ Integration with other SAP applications

▪ Usability / Performance improvements

▪ Machine Learning for automation and optimization

▪ Enhancements of existing features (e.g. drop-downs in custom

fields, additional fields in Excel-Import)

Continuous invest in cross topics:



Solution in Detail

Brochure

• Overview Video

• Machine

Learning Video

Compendium

Flipbook

CIM Data

Commentary

Key Assets

https://assets.cdn.sap.com/sapcom/docs/2016/02/f0e72266-5e7c-0010-82c7-eda71af511fa.pdf

https://youtu.be/aMtD-SyA4Eg

https://d.dam.sap.com/a/XUJJm3/54977_GB_54977.pdf

https://www.cimdata.com/en/resources/complimentary-reports-research/commentaries/item/9337-costing-across-global-value-chains-sap-product-lifecycle-costing-commentary

https://assets.cdn.sap.com/sapcom/docs/2016/02/f0e72266-5e7c-0010-82c7-eda71af511fa.pdf

https://youtu.be/aMtD-SyA4Eg

https://youtu.be/tegeARUhl9Y

https://d.dam.sap.com/a/XUJJm3/54977_GB_54977.pdf

https://www.cimdata.com/en/resources/complimentary-reports-research/commentaries/item/9337-costing-across-global-value-chains-sap-product-lifecycle-costing-commentary



openSAP Course – Freedom to Calculate with SAP Product Lifecycle Costing

Enrollment is now open!

https://open.sap.com/courses/plc1

Petra Köpfer-Behncke

[email protected]

Thank you

mailto:[email protected]