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Cost Analytics

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  • 1. Cost AnalyticsAltair Technology Conference 2013Ing. Giovanni GiorcelliICT Engineering & PlatformTurin, April 24th 2013
  • 2. Abstract• Trucks’ development process involves a massive amount of data, organized in streamscoming from the engineering department, the manufacturing floor, the supply chain andmany other internal and external sources.• The degree of control over these processes depends on the robustness of thecontinuous integration among these data streams, which is secured only whenintegration protocol are standardized and run on a regular and possibly automatic basis.• Cost Analytics approach gives to engineers the capability to forecast and compare costbandwidths for parts and assemblies from concept development, detailed design and as-manufactured, while gathering relevant data from CAD, PLM, ERP, and other datasource.• Leveraging Business Analytics into the process of product costing gives value, in aneasy and integrated way: quick, reliable real-time analysis and alerts of costs of theproduct being developed, stronger control over product evolution to maximize margins,powerful Analytics tools to analyze and compare BOMs‚ composition and attributes, tosupport decisions on how to move forward and minimize risks.24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 2
  • 3. Product Costing24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 3TARGET COSTING MANAGEMENTTARGET SETTINGEstimation EstimationSOURCINGBOTTOM-UP COSTINGCHANGE MANAGEMENTCOSTINGPROCESSFINANCIALRESPONSIBILTIESProduct Concept Strategic Setup Technical SetupTechnical &TechnologicaldevelopmentToolingProcessverificationPre-Series Ramp-up MaintainIN PRODUCTIONDESIGNCONCEPT DEVELOPMENT• Product Costing is the process of tracking and studying all the various expenses thatare accrued in the production and sale of a product, from raw materials purchases toexpenses associated with transporting the final product to retail establishments.• The two biggest challenges for product costing are intercompany data sharing andcommunication along with the supporting IT systems.
  • 4. Company’s interdependencies24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 4Platform ControlPlant ControlValue AnalysisProduct CostPlatform ManagersProject EngineersProcessEngineers/WorkAnalysisQualityPurchasingProduct Costing / Margin Analysis is an essential practice for the business strategy. Somany actors / tools and redundancy of manual operations results in a disproportionatenumber of time consuming and repetitive - though delicate - activities, which leads toinefficiencies and security risks at operational level and eventually lack of satisfaction formanagers and executives.
  • 5. The contest in IVECO24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 5PDCMCurrent ProductAnalysis andreporting capabilitieswhich help themaintenance phaseof the product, toshow cost differencesbetween similarcomponents, used atthe same levels of the“Functional Views”.New ProductSupport throughall the phases ofnew productdevelopment,bills of material,costs, weight,and toolinginvestment.Planning Concept Design Product and ProcessDevelopmentIndustrializationand LaunchProductionMonitoring
  • 6. Cost Tracking Classifications24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 6• Typically a new project starts identifying a product as a reference: from this referencewe start to identify the content of the new product, according to its requirements by themanagement of the "carry-over" parts and new specific parts.• Baseline changes are tracked in time, both in terms of BOM structure and cost.• PDCM data management will be based on "Target Setting" and "Target Costing" logic.Reference BaselineBaseline UpdateCostTargetsActual Cost of New ProductStrutturaSistemiPotenzaComfortSicurezzaFinizioni0 20 40 60 80 10084.318.517.58.723.663.627.4 27.438.634.646.945Review1 Review2Baseline Target Current253237BL PR1 PR2ECR/ECOECR/ECOECR/ECOSis 1Sis 2Sis 3Sis 4Sis 5CostReferenceTargetCalculatedEstimatedActual
  • 7. The functional view BoM management24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 7The product’s bill of material is drilled down bymeans of functional view.Engineering ViewEbom structure andengineeringparameters (cid,cha, for, etc..)Manufacturing ViewPbom structure forplant andmanufacturingparameters (make,buy, etc..)OI6r241990OI7r--OI1r24OI5r24OI3r24OI4r5OI2r10OI8r--Dis 1 Dis 3Dis 6Dis 4Dis 5Dis 2 Dis 7 Dis 81212PDCMFunctionalViewFunctionalViewEngineeringManufacturing
  • 8. Functional View: an example24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 8
  • 9. Defining Business Analytics24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 9vMeasureWhere is the Problem?QuantifyReportWhat Happened?CommunicatevvExploreWhy did it happen?UnderstandPredictWhat may happen?ActionOptimizeWhat should we do?Solution
  • 10. Business Analytics24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 10• Data analytics for guided decisionmaking• Business data• Engineering data• Drill through complex data• Hierarchical• Relational• Data cubes• Mathematical analysis• Rollups, statistics, programming• Rich, interactive data visualization
  • 11. Cost Analytics24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 11MissionPerform cost analysis acrosstotal product lifecycleSingle source reference tool forcost managing as manyconfigurations as neededacross product families,accordingly with securitypoliciesObjectiveForecast, track and comparecost for parts and sub-assembliesForecast and compare costbandwidths for parts,assemblies from conceptdevelopment, detailed designand as-manufactured whilegathering relevant data fromany PLM, ERP and other datasourceResultsAnalyze, evaluate andvisualize multiple scenariosIdentify the data reliability inrelation with the stage ofdevelopment and targets toachieve, managing the relationsbetween parts, assembly,configurations, and alternativedesigns
  • 12. Business Analytics for Costing24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 12Cost Analytics provides managers, executives and their teams, with:• quick, reliable real-time analysis and alerts of costs of the product being developed;• stronger control over product evolution to maximize margins;• powerful Analytics tools to analyze and compare Bill of Material‚ composition andattributes, to support decisions on how to move forward and minimize risks;• expedite collaboration process for better results b/w all departments and suppliers;• transparency allows Executive participation DURING the process.
  • 13. Cost Analytics Reports24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 13
  • 14. Cost Analytics Reports24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 14DELTA DRILL STABILIMENTICostiPLGA4CA2000002 - 31/10/2010 - Standard Cost (1)Suzzara11 756.58Valladolid11 976.65Delta220.081.9%CINE 92.5%STRU 85.2%CONF 8.3%POTE 3.5%+275.64-55.56+275.64STRU: 234.72CONF: 23.01POTE: 9.54SIST: 6.20S_NA: 2.17VARI: -4.19CINE: -51.37-55.56
  • 15. Thank You for Your Attention24/04/2013 ATC 2013 – Cost Analytics Data classification: PUB 15