MAN reduces product costs with 4cost costing software
The aim is to reduce product costs, the costing software from 4cost GmbH was introduced at MAN Diesel & Turbo, which makes costing more transparent and systematic throughout the entire product development cycle. When using the 4cost-suite, it is now possible to create valid cost estimates early stages of projects and continuously track the cost.
At MAN Diesel & Turbo SE in Augsburg, medium-speed large diesel engines and exhaust gas turbochargers are produced. The site also has its own foundry, engine test benches, a hardening shop, mechanical and machine processing as well as a paint shop.
Efficient production is essential to survive in global competition. It is necessary that product development costs can be determined and influenced in an early phase of product development. It is also necessary to monitor the costs during production in order to be able to identify possible deviations and, if necessary, to initiate suitable countermeasures. The responsibility lies in the hands of the EEPC team to fulfil this task at MAN. This team is organised and structured in a matrix organization and has 20 team members. A distinction is made between cost managers and value engineers. Cost managers oversee a specific engine. They act as value analysts and also observe the progress of production costs in projects. The cost managers are supported by value engineers. The value engineer assumes cost responsibility for certain assemblies across all engine projects and conducts value analysis. Furthermore, due to their many years of professional experience, they are specialists in various production methods, which enables them to calculate the respective manufacturing cost.
Due to the complexity of the cost structures, a software solution was sought for, that would support employees in estimating the costs of development projects and cross-checking current costs in an existing series production. The software should enable MAN to enhance cost transparency and a more systematic costing approach. The head of department, Mr Manfred Billes, spend over a year to get a precise overview of the software solutions available on the market.
One of the overwhelming, decisive factors in the decision for the software solutions from 4cost were in particular the unique parametric approach of the 4cost-aces tool. It’s simple and clear application and the large range of functions, which made it possible for all requirements to be met “from a single source”. The comprehensive service and support provided by 4cost GmbH were also reasons for the decision to use the 4cost costing software.
The 4cost team was available to users all times during the implementation process, which lasted a total of six months. Two two-day workshops were initially held to learn how to use the 4cost costing software. As a result, the employees were able to use the basic functions in practical applications. The employees were then supported directly at their workstations by employees of 4cost GmbH, this made it much easier to integrate the costing software into the daily routine. The experts of 4cost were always available for questions and resolving problems. Tips and tricks could also be shown, thus speeding up the learning process of the tools and achieving fast and efficient working. In addition to this on-the-job training, there were again workshops at approximately three-week intervals, in which special individual functions were explained in more detail. This combined approach made it possible for all employees to learn the calculation system quickly and in detail without disrupting daily operations.
After the intensive support period, the employees of 4cost GmbH were always available by phone to answer any questions. “Due to the constant contact between the users and the developers of 4cost GmbH, change requests and suggestions for improvement were exchanged. This led to constant further development and improvements of the individual applications,” says Mr Manfred Billes, department head of the EEPC team at MAN. “By increasing transparency in the cost structures, a monetary benefit in the seven-digit range can already be recorded.”
The costing software from 4cost supports cost calculations in the very early phase of product development. After the basic product idea has been created, 3D images or hand sketches are first made, drawings or key points are made. With this early information, a cost calculation is then carried out. A top-down approach is typically used. The necessary calculation information is not taken from a database. Instead, different cost estimation relationships are available, which have been collected over a long period of time from a wide range and variety of industrial and economic sectors. This enables a cost estimate to be made which, depending on the quality of the technical information, has a precision of +/- 5 to 10 percent of the actual costs achieved. Up to 95% accuracy is possible in early product phases. The results of this analysis can then be used as a basis for an investments or other decisions.
If a decision for development is made based on this data, the 4cost-structure tool is then used. This involves a bottom-up analysis. The cost categories like design, purchasing and production are considered in detail. The various processes are subdivided down to the REFA level, which enables a very detailed cost calculation. Following this path, valid cost potentials can also be determined, analysed and alternatives can be evaluated.
In addition, MAN uses the 4cost-prediction tool for multidimensional predictions of individually existing parameters. In order to respond to MAN's individual requirements, the existing databases with predefined standard components and groups were supplemented with information from projects that had already been completed. “The existing database was already very large and it was easy to work with it. However, it gave us great added value that we could supplement our individual data. The addition of parameters into the prediction tool of 4cost is made via a really clear dialog and is therefore very simple,” says Manfred Billes, explaining the use of 4cost-prediction.
Manfred Billes conclusions: “The departments experience made with the costing software from 4cost are very positive and associated with high savings. We have made the right decision in our selection process and are very happy about our success! Right now, we are examining whether the 4cost software will be introduced in other areas at MAN.”