sap product lifecycle costing on premise and cloud edition

CUSTOMER

Product Management, SAP SE

June 15th, 2021

SAP Product Lifecycle Costing on Premise and Cloud EditionCalculating future Product Profitability

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information in this document is not a commitment, promise or legal obligation to deliver any material, code or

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limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. This

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for errors or omissions in this document, except if such damages were caused by SAP´s willful misconduct or gross

negligence.

All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ

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Agenda

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

2. Solution Overview & Use CasesSolution Introduction and references

3. Live DemoWhat is New in Cloud Edition 2103 & On Prem 4.3

4. Summary and Roadmap


Challenges in early costing

01

Challenges, use cases & industry relevance


Product

Manager

Requirements &

Cost Engineer

Systems

Engineer

Quality &

Compliance Engineer

Production

Engineer

Operations Engineer

Detailed Design OperateProductionEarly EngineeringIdea / Requirements Prototyping

R&D/Engineering - Product Development

Research

Basic Research

Project Management

Costing Templates

R&D Program Management

Project Management for New Products

Resource Management

Budget Costing

Commercial Management

Entitlement Management

R&D Product Management

Product Compliance Quality / Testing

Engineering Engineering Operations

Requirements Management Product Norms Software EngineeringAccess Governance and Identity Management

Market Research Idea Management

Product Standard Compliance

Electronics Engineering Single Sign-on

Portfolio Management Quality AssuranceMechanical / Tools Engineering

Access Monitoring

Product Costing Test & Validation Systems Engineering Data Loss Prevention

Cost TrackingActual vs. Planned Comparison

Lifecycle Costing

Digital Validation Software Operations

Master Data Release Management

Engineering HW / SW / Networks

Master Data Creation

Change / Release Management

R&D/Engineering - Product Development Roles and Responsibilities


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.

Companies are challenged by diverse business processes, data and system landscapes making product costing challenging with designs, sourcing, and manufacturing being performed across multiple sites.

Why SAP Product Lifecycle Costing matters


Innovation Curve

Cost

Doc BOM

eBOM

mBOM

Plant 1

Plant 2

Routing

Start of Production

Concept Design Sourcing Prototyping /

Tool Planning Production

Handover

!

As built

mBOMPlant 1

Plant 2

Ramp Up

Co

st

of

De

sig

n C

ha

ng

es

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

Requirements

Time

SAP Product

Lifecycle Costing


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


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


Solution Overview

& Use Cases

02

Solution Introduction and references


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 timeSAP HANA

User centricMicrosoft Excel–like UI

OpenSAP ERP or S/4HANA,

Microsoft Excel, non SAP

FlexibleCost structure

Two Deployment Options:

On-Premise & Cloud

Integration with SAP ERP or

SAP S/4HANAHigh performance

Boost your company’s profitability in the digital age with SAP Product Lifecycle Costing

Solution Definition

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

https://www.sap.com/assetdetail/2020/04/0c6b3224-917d-0010-87a3-c30de2ffd8ff.html


SAP Product Lifecycle Costing

Costing Model

Quantity

for One

Total

Quantity

10 PC

1 PC 10 PC

4 kg 40 kg

fx 1.1 EA 11 EA

50 min 50 min

10 min 110 min

Total

Cost

Price

per Unit

537.60 € 53.76 € / PC

537.60 € 53.76 € / PC

376.00 € 9.40 € / kg

161.60 € 14.69 € / EA

50.50 € 60.60 € / h

111.10 € 60.60 € / h

Source Seq From Price

ERP 1 1.Jan 60.60 €/h

PLC 2 1.Jul 59.90 €/h

Source Seq From Price

ERP 1 1.Jan 9.50 €/kg

ERP 1 1.Feb 9.40 €/kg

PLC 2 1.Mrz 9.90 €/kg

Any 3 1.Mrz 8.90 €/kg

Any 3 1.Apr 9.20 €/kg

Master

DataSAP ERP

Non-SAPERP

Product

Cost

Estimate 0203

Quantity

Structure

SAP ERP

Non-SAP ERP

01


Master Data

CostingStructure

Frequent Master Data Replication• Supplier Prices• Hourly Rates• Currency Rates• …

Forecast, Prediction, Machine LearningPrices, Currencies, Volumes, Overheads, …

• Plant• Material• Cost Center• …

AutomationMass Calculation, Integration, Simulations

SAP PLC Costing Model to calculate actual and future cost with volatile, changing, and incomplete information

Reporting, Target Monitoring & Decision Making

Extensions Customer-Specific Logic, Apps & Integrations PLC

Analytics (Embedded & External)

SAP ERP

S/4

HANA

Non-SAP ERP

Bill of

Materials

Production Process (Routing)

Quantity

Structure

Other Cost

Elements

Automation

Extensibility

Machine

Learning


The integrated Costing Hub


SAP HANA System / SAP Cloud Platform*

C++/AFL

Any Database

SAP ERP or S/4

(on-premise)

HANA Database / HANA Service*

SAP Landscape

Transformation

Replication Server

Transactional Data

optional

Business Logic (Java / JavaScript)

HT

TP

S

Microsoft ®

Excel

optional

Legacy System

optional

Add-In

Framework

REST API

optional

AnalyticsInA

HANA

Analytics

Adapter


High-Level Architecture

Calculation

EngineReplicated Master Data

Analytic Views

XS Advanced / Cloud Foundry*

Local Master Data

SQ

LStored Procedures

(SQL Script)

HTTPS

* Cloud Edition

SAP Product Lifecycle Costing - Frontend Application

(Microsoft Windows application, C#/WPF, auto-updating)

RFC


Costing Structures

SAP Product Lifecycle Costing Key Capabilities

Flexible, Hierarchical Costing Structures,Roll-Up Capability, Versioning

Variant Matrix, Reference Calculations,Import of BOMs and Routings

Costing

Real-Time SAP ERP Pricing Information,Flexible Price-Determination Logic

Intercompany Costing, Multiple Currencies,Profitability and Margin Calculation

Product Lifecycles

Current and Historic Cost Tracking,Lifecycle Volumes, Surcharges

One-time cost distributionComparison of Current and Historic Costs

Extensibility

Flexible Extensibility Based on APIs, and Add-In Framework

Master Data

Flexible Master Data Creation,Multiple Price Sources, Flexible Costing Sheets,

SAP ERP & S/4HANA Integration,Open Integration to Legacy Systems

User Experience

Spreadsheet-Like Design,Mass Change, Searching, Filtering,

Highlighting, Layouts, Tags, Statuses,Custom Fields and Formulas

Analytics and Reporting

Real-Time Analytic Data, Preconfigured Analytics and Views,

Data for Dashboard Reporting,Simulation of “What-If” Scenarios

SAP Product Lifecycle Costing - Open SAP Course

Advanced Technology

Real-Time Calculation Engine Powered by SAP HANA,Role-Based Authorization,

Multiple Deployment Options,Data Protection and Privacy

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


Work with SAP Product Lifecycle CostingCreate Structure – Calculate Parameters – Find Prices – Roll-Up Cost – Simulate Alternatives

Import the costing structure from SAP ERP, Excel or any other data

source such as PTC Windchill or others, or

manually create the costing structure

Simulate cost estimates and create further versions with more detailed and up to date price information

Automatically determine material and activity prices according to a defined

price determination strategy, with SAP ERP, other source or locally maintained

prices, or manually set prices in a calculation

Calculate and save a first cost estimate as initial basis

1

2

3

4


30+ Customers did and continuously do co-innovate with us

…

http://www.microsoft.com/

http://www.sofaselections.com/sites/default/files/vendor/sauder_logo.jpg


Lifecycle Costing

Preliminary Cost Estimate for

Continuous Improvement

Preliminary Cost Estimate for

New Product Introduction

Quotation Costing

AGCO (agricultural OEM company) improves cost accuracy and profit margins by integrating SAP Product Lifecycle Costing, SAP ERP, and PDM systems to create

one global costing tool. Great user experience and automation increases efficiency and allows cost engineers

to focus on value-added activities. Watch the video

Bühler (special machinery solution provider) manages quote costs in engineer-to-order scenarios faster, with greater cost accuracy, and lower financial risk, by integrating SAP Product Lifecycle Costing with SAP ERP, a quote system, and SAP Configure, Price, and Quote. Watch the video | Read the story

Varian (medical device company) increases product profits and reduces time-to-market by accurately calculating against target costs. Integrated design BOMs authored in CAD design tools and managed in PLM allow full performance traceability for manufacturing, supply optimization steps, and design. Watch the video

Daimler (automotive OEM) improves product margin by costing future product profitability with SAP Product Lifecycle Costing and Machine Learning. Establishing a single costing calculation across all business units has

helped this intelligent enterprise slash product costs for new projects. Watch the video | Read the story

SAP Product Lifecycle Costing Customer Examples

https://www.sap.com/assetdetail/2019/04/2a01e08a-467d-0010-87a3-c30de2ffd8ff.html

https://www.sap.com/assetdetail/2019/05/c83c1232-4d7d-0010-87a3-c30de2ffd8ff.html

https://www.sap.com/documents/2017/09/3219cea5-d27c-0010-82c7-eda71af511fa.html

https://www.youtube.com/watch?v=yZf8hwi2dQs&list=PL00ZizFAuhWtC2eSxUOaRYxrC75sPzRef&index=4&t=0s

https://youtu.be/fSQyBQvKhQM

https://www.sap.com/assetdetail/2019/04/a40b7d8c-467d-0010-87a3-c30de2ffd8ff.html

https://www.sap.com/documents/2019/08/30c4dab2-5f7d-0010-87a3-c30de2ffd8ff.html


03Live Demo

What is New in Cloud Edition 2103 & On Prem 4.3


SAP Product Lifecycle Costing Cloud Edition 2103New Features

• Replicate master data to SAP PLC in a more flexible and automated way

Intercompany Costing

• Different scenarios at the same costing sheet and cost component split

Additional languages

• New language options: Spanish, Italian, French

Side-by-side Comparison

• Compare two calculation versions efficiently and flexibly

Master Data Replication Tool


SAP Product Lifecycle Costing On Prem Version 4.3New Features

Intercompany Costing

• Different scenarios at the same costing sheet and cost component split

Side-by-side Comparison

• Compare two calculation versions efficiently and flexibly

Additional languages

• New language options: Spanish, Italian, French


• Replicate master data to PLC in a more flexible and automated way

Custom fields as links

• Storage external links using custom fields for items and master data

Configure Lifecycle Periods

• Calculate future costs for customizable lifecycle periods

One-time Cost Distribution

• Distribute one-time project costs across the project lifecycle


Highlights

• Full flexibility in replicating master data from external

systems, including custom defined tables and fields

• Easier maintenance of conversion logic, using the

administration web interface

• Possibility to import data coming from several external

systems

Motivation / Context

• Setting-up replication with SLT is a complex process

• Custom fields and tables are not considered by the SLT

replication




Create Configuration

Select the relevant object and click on Configure to configure replication rule

Enable the objects which are relevant for replication



Save Configuration

Input SQL script to define the rules

Preview mapping and data



Schedule Replication

Run replication right away

Define replication frequency on a daily, weekly or monthly basis

See detailed information on scheduled jobs such as status, start time, or end time



Check Logs

Check for moredetailed informationon a replication job



Check Statistics

Check aggregated statistics for replication jobs and the number of replicated records created, updated or deleted for each entry


Highlights

• Enhancements to Costing Sheet allow now two more costs on

the costing sheet level (beside the Total Cost)

• One cost can contain all the overheads needed for group costing

• Another cost can contain all the overheads needed for

intercompany costing


• Requirement to enable to analyse group view and inter-company

view simultaneously

• Requirement to create multiple costing sheet scenarios using a

single costing sheet

Intercompany Costing Scenario (Costing Sheet Enhancements)


Intercompany Costing Scenario

Set up costing sheet for intercompany costing scenario

Check the boxes to include different rows into costing sheets for different intercompany costing scenarios

Set up rows to calculate different overheads/sums for intercompany scenarios

Use formula to enhance the scenario-specific overhead calculation



Choose different scenario at the same costing sheet in a calculation view

Select different scenarios at the same costing sheet



Different total cost for a different scenario

Costing sheet is calculating total cost differently according tothe selected scenario



Choose different scenario at cost component split

Select different scenariosat cost component split



Different scenario presents different cost components

Cost component splitshows total cost according to the scenario


Highlights

• Leverage a new UI5 application view to:

▪ Select two calculation versions for comparison

▪ Define which fields you want to compare

▪ Create layouts to compare specific fields and

save them for an quick reuse

▪ Export the results of a comparison to MS Excel


• Requirement to compare two calculation versions

side-by-side directly in SAP Product Lifecycle Costing

application

Side-by-side Comparison of Calculation Versions



Option: select versions to compare directly from Compare Calculation Versions

Find and select calculation versions directly from the comparison screen



Save layout for future comparison of calculation versions

Adjust and save layout for future re-use



Export results of comparison to MS Excel


Additional Languages

Motivation / Context• Currently following languages are supported: English, German, Traditional

Chinese, Simplified Chinese, Japanese.

• Business requirement to provide additional languages as well.

Highlights

• Following languages get enabled for SAP Product Lifecycle Costing

solution: Spanish, French, Italian.


Highlights

• When creating custom fields for items and master data, a new selection called Link is now available in the Data Type dropdown.

• With this you can:

− Create and save custom fields as links in the Administration View

− Visualize, edit, and access custom fields as links in the Calculation View

− Use formulas to create specific custom fields as links


• Requirement to store and open external links.

Custom Fields as Links

Store external links using custom fields for items and master data


Create Custom Fields as Links in Admin View

Maintain a certainlink as defaultvalue

‚Link‘ as data type becomes available




Visualize, edit, and access custom fields as links in the Calculation View

Possible to edit link custom field at calcualtion view

Press ctrl and clickon the link to open it in browser



Use formulas to create specific custom fields as links

User formulas to create specific custom fields

Values from custom fieldsCUST_PART1 and ‚CUST_PART2 are concatenated as link


Highlights

• The Project view got enhanced by two new views.

• You can now:

− Define the frequency of the lifecycle versions generation in the view Lifecycle Periods to: yearly, quarterly, monthly, or custom.

− Users can maintain the name of each lifecycle period.

− Distribute the quantities for each lifecycle period in the view Lifecycle Quantities.


• Requirement for calculating the future costs within projects on a more granular level.

Monthly Lifecycle Versions

Calculate future costs for customizable lifecycle periods


Define lifecycle periods on yearly, quarterly, monthly, or customized basis


Lifecycle periods canbe self-defined flexibly


Maintain lifecycle quantities based on defined lifecycle periods


Maintain quantitiesbased on lifecycleperiods


Calculate future costs based on defined lifecycle periods and lifecycle quantities



Highlights

• You can distribute the one-time costs equally or based on quantity.

• The Project view has been enhanced. Now you can:

− Define one-time costs to be distributed

− Distribute one-time costs equally or based on quantity to selected calculations belonging to the project

− For each calculation, distribute the one-time costs equally or based on quantity throughout the project lifecycle


• Requirement to distribute one-time project costs (for example investment cost) across the project lifecycle.


Distribute one-time project costs across the project lifecycle


Maintain and distribute one-time costs for project(s)


Costs are distributedbased on user selection


Assign one-time cost to lifecycle calculations



Assigned one-time costs are included in total cost of lifecycle versions



One-time cost generated as variable item in calculation version(s)



Planned vs actual costs – Analyzing in SAP Analytics Cloud

❑ Calculate early product cost in SAP PLC→ planned cost

❑ Calculate product cost in SAP S/4HANA shortly before SOP (CK11N)→ actual cost

❑ Data from both systems (data sources) will be merged into one story in SAP Analytics Cloud

➔ Compare your initial cost estimation with the final cost calculation


Summary & Roadmap

04


???

Highlights

• Integration capabilities for all enterprise systems, for simplified cost breakdown and business case analysis

• Rich, flexible configuration and extension capabilities

• Simple handling of large and complex costing structures

• Consideration of dynamic volumes and cost factors to calculate entire product lifecycles

• Extensions to support integration with other SAP solutions and legacy systems in your IT landscape

• Timeless, intuitive user interface

• Rich analytics integration with SAP and third-party analytics software solutions

• Early and accurate cost forecasting with temporary or incomplete master data


Differentiate yourself from the Competition

Anderes Bild


SAP Product Lifecycle CostingStay up to date with our latest innovations in the SAP Roadmap Explorer

Continuous investment in cross topics:

▪ Public backend API

▪ Extensions to add-in-framework

▪ Usability improvements for existing functionalities

▪ Improvement requests from Customer Influence tool

Discover Now

Cloud Edition

Discover Now

On-Premise Edition

Continuous investment in cross topics:

▪ Public backend API

▪ Extensions to add-in-framework

▪ Usability improvements for existing functionalities

▪ Improvement requests from Customer Influence tool

https://roadmaps.sap.com/welcome

https://roadmaps.sap.com/board?range=CURRENT-LAST&PRODUCT=73555000100800001573#Q1%202021

https://roadmaps.sap.com/board?PRODUCT=73555000100800000088&range=CURRENT-LAST


YouTube Playlist

Where to find more information

Solution in Detail Brochure

SAP Web Site

SAP Help Portal

Free Trial System

Solution Overview Brochure

https://www.youtube.com/playlist?list=PL00ZizFAuhWtC2eSxUOaRYxrC75sPzRef

https://www.youtube.com/playlist?list=PL00ZizFAuhWtC2eSxUOaRYxrC75sPzRef

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

https://www.sap.com/documents/2016/02/f0e72266-5e7c-0010-82c7-eda71af511fa.html

https://www.sap.com/products/product-lifecycle-costing.html

https://www.sap.com/products/product-lifecycle-costing.html?btp=14df3f0c-50ff-4887-bec2-c0c67c300fac

https://help.sap.com/viewer/product/SAP_PRODUCT_LIFECYCLE_OVERVIEW

https://help.sap.com/viewer/product/SAP_PRODUCT_LIFECYCLE_OVERVIEW

https://www.sap.com/cmp/td/sap-product-lifecycle-costing-trial.html

https://www.sap.com/cmp/td/sap-product-lifecycle-costing-trial.html

https://www.sap.com/documents/2020/09/c6c84413-af7d-0010-87a3-c30de2ffd8ff.html

https://www.sap.com/documents/2020/09/c6c84413-af7d-0010-87a3-c30de2ffd8ff.html


Bühler Group AGCO Varian

Customer Stories

Daimler


https://www.sap.com/assetdetail/2019/04/2a01e08a-467d-0010-87a3-c30de2ffd8ff.html

https://youtu.be/fSQyBQvKhQM


https://www.sap.com/documents/2017/07/fa014233-c67c-0010-82c7-eda71af511fa.html

https://www.sap.com/assetdetail/2017/08/0c24753d-cd7c-0010-82c7-eda71af511fa.html

https://www.sap.com/documents/2019/08/30c4dab2-5f7d-0010-87a3-c30de2ffd8ff.html

Contact information:

Katarzyna Maciak

Global Product Manager


[email protected]

Thank you.

Thorsten Mahlenbrei

Presales Support


[email protected]

mailto:[email protected]

mailto:[email protected]

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In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or

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and SAP SE’s or its affiliated companies’ strategy and possible future developments, products, and/or platforms, directions, and

functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason

without notice. The information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or

functionality. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ

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