Quantity 1: Transparent costing as a success factor in one-off production

Customised production, also known as contract manufacturing or one-off production, has become increasingly important in recent years. More and more companies are having to adapt to realising individual customer requirements flexibly and efficiently. The ability to offer customised solutions is seen as an important competitive advantage in sectors such as mechanical engineering, medical technology and special vehicle construction. However, this special form of production not only brings opportunities, but also considerable challenges – particularly in terms of costing.

In contrast to classic series production, where processes and parts lists are standardised, customer-specific production is characterised by an enormous variety of products and frequently changing requirements. This makes it difficult to estimate costs precisely in advance and present them transparently. Material requirements, production times and necessary development steps can often only be precisely quantified once the project is well advanced. This increases the risk of miscalculations, costly rework and economic disadvantages – for both the company and the customer.

The aim of this article is to shed light on the special requirements of costing in customised production and to show practical ways of creating transparency despite all the uncertainties. Companies benefit from this in several ways: they create trust with customers, strengthen their internal planning security and secure a decisive competitive advantage through comprehensible prices.

Customised production differs fundamentally from classic series production. While series production involves the manufacture of large quantities of a standardised product, customised production involves the implementation of tailor-made solutions according to specific requirements. This form of production is particularly popular in sectors where individual products differ greatly from one another. These include, for example, mechanical and plant engineering, medical technology or the construction of specialised vehicles. In these sectors, the products are often one-offs or small batches that are customised precisely to the intended use and the customer's wishes.

The complexity of customer-specific projects is usually significantly higher than that of standardised products. Many influencing factors must already be taken into account in the planning phase. In addition to technical requirements and functional specifications, factors such as delivery times, material availability and necessary certifications also play a role. Changes requested by the customer during the ongoing project also mean that processes must remain flexible. This high level of flexibility not only requires companies to have comprehensive technical expertise, but also precise control and documentation of all processes.

Individual requirements also have a direct impact on the cost structure. Standardised calculation models are often not sufficient to reflect the actual costs and risks. Instead, a detailed analysis of all process steps is necessary in order to be economically successful and at the same time create an attractive offer for the customer. The fundamentals of customised production are therefore closely linked to the challenges of transparent and reliable cost calculation.

Cost calculation in customised production is associated with special challenges that differ significantly from those of series production. The key difference is that every project and every product has individual requirements, which pushes traditional costing to its limits. While many costs in series production can be reliably calculated using empirical values and standard processes, many unknowns often have to be taken into account in customised production.

One of the biggest challenges is to differentiate between one-off and recurring costs. Special costs are often incurred for customised orders, for example for special tools, individual planning services or the adaptation of production processes. These costs often only exist in this form for a specific project and are difficult to transfer to other orders, which makes costing more difficult. In addition, there are uncertainties when estimating material requirements and time expenditure. As the end product is often unique, there may be a lack of reliable empirical values. As a result, assumptions have to be made that may turn out to be inaccurate as the project progresses.

Further challenges arise from deviations from the standard process. Adjustments that only become necessary during the course of the project can lead to cost shifts. Change management in particular, i.e. the control and documentation of changes during implementation, often results in uncalculated expenses. Every change has to be reassessed, recalculated and often agreed with the customer. Errors in this process quickly lead to a lack of transparency and unforeseen cost increases.

External risks are an additional uncertainty factor. Fluctuating raw material prices, delivery delays or unexpected technical problems have a direct impact on costing. Dealing with such uncertainties requires a high degree of flexibility and continuous adjustment of the calculation. Companies must therefore develop mechanisms to recognise risks in good time and manage their cost consequences.

Transparency in cost calculation is a decisive factor for sustainable success in customised production. Companies that can present their costs openly and comprehensibly create a basis of trust that is indispensable, especially in the complex project business. Customers not only want customised solutions, but also clarity about how the price of a customised service is made up. If companies can guarantee this transparency, it increases satisfaction and makes long-term collaboration more likely.

But transparency not only pays off externally. It also offers significant advantages for a company's internal processes. A clear cost structure facilitates the planning and management of projects and helps to utilise resources economically. Project managers can recognise bottlenecks and cost traps at an early stage, initiate countermeasures and thus improve profitability. At the same time, transparent costing provides the basis for well-founded decisions throughout the entire value creation process.

Last but not least, the disclosure of costs is also an important competitive factor. In a market environment in which customers carefully compare offers, companies that present their pricing clearly score points. They stand out from the competition because they convince customers with fair and clearly communicated prices.

Transparent costing in customised production requires the use of innovative methods and modern software solutions. The basis is formed by structured costing procedures that enable realistic cost estimates to be made in the early project phase. Preliminary costing plays a central role here, as it allows a well-founded cost estimate to be created on the basis of empirical values and initial project specifications. This is continuously reviewed and adjusted as the project progresses. In addition, the post-calculation provides important information for future projects, as it compares the actual costs incurred with the original estimates and analyses deviations.

Professional costing software is ideal for managing the complexity of cost calculation in customised production while creating the necessary transparency. While simple spreadsheets quickly reach their limits when it comes to the complexity of individual projects, specialised tools offer the necessary structure and reliability. These systems enable all relevant cost data such as material prices, machine hour rates and labour costs to be managed centrally and calculated on a uniform basis. This not only minimises the risk of manual errors, but also ensures that everyone involved in the company has access to the same, up-to-date information.

Parametric costing is particularly noteworthy here. Essentially, this innovative method is based on estimating costs using defined parameters that are directly related to the specific characteristics of the product or project. Such parameters can include, for example, dimensions, weights, technical functions or the complexity of individual assemblies. Parametric costing has great advantages, especially in the early project phases: it makes it possible to make a reliable statement about the expected costs with limited information. As a result, quotations can be prepared more quickly and different variants can be objectively evaluated. At the same time, the transparency of the parameters used ensures that customers can understand how the offer price is made up. This not only increases trust but also makes it easier to adjust the calculation at a later date if the framework conditions change.

The use of professional costing software creates transparency on several levels. Internally, it provides a comprehensible basis that enables precise preliminary costing and reliable final costing. Deviations between planned and actual costs become visible at an early stage, resulting in better control and greater efficiency. Externally towards the customer, the software enables the creation of detailed and comprehensible quotations. Individual cost blocks can be clearly itemised and changes during the course of the project can be precisely calculated and documented.

In order to ensure the transparency of cost calculation in customised production in the long term, all internal processes need to be consistently aligned. Clear workflows and clearly defined responsibilities form the basis for ensuring that every step in the costing and production process remains traceable. Close co-operation between different departments ensures that knowledge and information are pooled and sources of error are reduced.

Ongoing dialogue with the customer is a key success factor. If changes or additional requests are communicated openly at an early stage, uncertainties regarding cost development can be avoided. In this way, price deviations can be explained and trust built up.

Equally important is a detailed structure in quotations and invoices that shows all items clearly and comprehensibly. This gives customers clarity about how the costs are made up, which makes the decision-making process easier and prevents misunderstandings.

Last but not least, documentation plays a key role in transparency. All adjustments and special expenses should be carefully recorded so that the calculation can also be clearly understood at a later date.

Transparent, reliable costing is essential for customised production. Those who manage to calculate individual projects in a comprehensible and precise manner not only increase the trust of their customers, but also secure advantages for internal planning and control. It has been shown that clear structures, open communication and the use of modern digital tools in particular make a decisive contribution to efficiently mastering the often complex and flexible requirements of customised production.