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4cost software in use at BARD Engineering GmbH

BARD Engineering is active in the development, production, turnkey construction and operation of offshore wind turbines. BARD has a pioneering position in this field of operation, in Germany.

BARD Engineering GmbH

BARD Engineering GmbH uses 4cost's software solutions in the area of strategic purchasing. This department is receiving all requested quotations from suppliers, assessing the quotations and the monetary review of the quotations. Equipped with the various modules of the 4cost software suite, the strategic purchasing department is methodically mastering the different requirements of daily business.

Before the introduction and use of the 4cost software, strategic purchasing was faced with the question of how to positively influence bid evaluation and supporting purchasing negotiations. BARD Engineering decided to validate incoming offers using benchmarks. In order to do this, the questions had to be answered as to whether there were universal databases available that could cover the broad purchasing spectrum of the BARD group. The use of databases was declined, because it could not be guaranteed to keep the data up-to-date. The dependency on various influencing factors such as order quantity and quality requirements cannot be easily derived from a database.

Furthermore, BARD was looking for a method to asses and map cost structures of the suppliers. This is to ensure that the suppliers were allowed the necessary overheads to successfully run their business. The contributed margin must allow a mutually acceptable profit volume.

The final decision was made after intensive workshops with 4cost personnel to assess a complete wind turbine. The costs determined in these workshops corresponded very well with the cost experiences known from the first projects. In addition to calculate the manufacturing costs, it was also possible to determine the one-off costs for components (development costs, tool costs, etc.).

The strategic buyers and the project managers, including the developers of the system, involved in the 4cost workshop were astonished about the transparent methodology of the parametric cost estimation process.

Stefan Buchwald, strategic buyer at BARD Engineering, explains that this initial workshop was very important for the decision-making process: “The workshop with the 4cost team was convincing both in terms of methodology and result. We were getting an idea of how the parametric approach of the 4cost-aces costing software works. Many new possibilities could now be approached in our daily work.”

The possible application of the continuous costing method in the company was presented to the management. “Involving the management was the right step, because the implementation of such an approach definitely represents a paradigm shift for a company,” says Buchwald.

After the 4cost solution was implemented, customer-specific projects and components were evaluated during the product training course. The user of the software quickly familiarised themselves with the operation of the modules. In subsequent training sessions and workshops, the knowledge and approach of the methodology was deepened. The department was very quickly able to evaluate its own projects. In assessing the pure manufacturing costs, it is now possible to evaluate overhead cost scenarios of different suppliers. This examination was conducted using the methodology of the cost structure analyses or a parametric approach to evaluate overhead margins. In consequence, the BARD group is now able to negotiate both costs and the resulting prices with suppliers.

“We have, at first, focused on so called A-components. Following with B-components of our offshore wind turbines. We are sure, to have similar positive results,” concludes Stefan Buchwald.