Systematic cost management allows any business to reap significant benefits, yet many companies struggle to implement it effectively. The challenges are often the same.
The implications of these problems are clear. The desired gains aren't achieved, there are delays in measures being implemented and the development of innovation is severely restricted.
Successful cost management with newboxes enables a systematic set of cost management activities and processes with modern tools that can be used throughout the organisation wherever it matters.
Get to know a completely new face of the supposedly old cost management with us and our partners.
With our innovative methods, proven in operational implementation, we create the necessary cost transparency within a few days, set up a sustainable program and support you in generating and implementing new cost measures
The new, agile VUCA world (volatility, uncertainty, complexity, ambiguity) is one where software is overtaking mechanics, new digital business models are becoming increasingly important, service costs are growing strongly in importance, digitalization and artificial intelligence is making progress every day, and much revolves around the analysis of big data. Here, cost management must also keep pace.
Future-oriented cost management takes the following into account:
With our partner, 4cost GmbH, and its innovative methods for cost and price calculation, we can set up cost programs that meet both established methods and new trends.
We distinguish between four phases, which we'll explain in this paper:
Your project starts. You're ready. But do you also have the necessary cost transparency? Can you derive goals for cost management that will stand up to questions from program members? Have you defined the right products (corner types) that need to undergo cost optimisation? What's your cost management plan for the short, medium and long term?
newboxes works with its experienced partner 4cost to provide answers to these questions.
Using standardised processes, 4cost analyses your product portfolio, derives the right products (corner types) for cost optimisation and defines program goals that stand up to any discussion.
4cost's innovative parametric models allow fast, yet accurate determination and analysis of costs and prices. Starting from a basic structure, which can either be read in by reference models or created from scratch, a detailed cost breakdown is presented.
Based on five parameters, target costs for components, modules or an entire system can not only be calculated within a few hours, but development efforts, project costs and software can also be determined.
The same structure is used throughout the entire product life cycle process. As a result, cost models can be further developed as the products mature. The initial top-down calculation based on pictures or sketches can be extended and thus refined by a bottom-up analysis based on parts lists and drawings.
4Cost's parametric models can therefore be used to evaluate electronic and mechanical assemblies as well as software. Technical and business scenarios are presented. As a result, you can with maximum accuracy:
This results in advantages for you that enable a successful program start:
As mentioned in the introduction, cost management has a significant impact on a company's success. That's why we often find an existing cost structure, but one confronted by various challenges:
To counteract these problems, in the first step we conduct an assessment of your cost organisation to evaluate whether the right goals have been defined, the necessary organisation set up, the right processes implemented, the necessary roles described and efficient IT tools implemented.
Putting the right team together in a cost program and building cost management support functions within the organisation are the foundations for success. The key roles in implementing a cost management program are touched on in the diagram below.
No cost program can be successful without the expertise of your staff. It's therefore not only a question of the right roles, but also of the necessary capacities of the experts.
We then introduce a standardised process by which all cost measures are driven so that there is a common understanding:
The next steps are the analysis and, if necessary, the adaptation of the IT tools. Here, the following questions are necessary for us to assess the IT landscape:
Once the program organisation has been set up, and processes and IT tools installed, the generation and implementation of ideas can begin.
A constant supply of new ideas is an essential part of successful cost management, but it also presents many companies with various challenges.
With our standardised method toolbox, we support you in the continuous generation of new cost reduction ideas, so that demanding targets can be met.
Based on your portfolio, we create an action plan of which products will be processed with which methods. The diagram below shows examples of methods we use to generate new technical or commercial ideas.
Subsequently, an initial evaluation of the ideas is carried out to be able to determine a prioritisation in the processing. All cost reduction measures are documented in the cost tool.
By defining ownership for each idea, we ensure that the prioritised actions are expedited as efficiently as possible.
Each cost idea then goes through the same process. Each generated measure is first described in detail. This is followed by the preparation of a schedule and cost plan, which are combined in a business case. The measure is presented to the decision-making body for approval for implementation.
After that, the preparation of the measure for series production begins. This is determined by the cost organisation. After the successful application in series production, the cost optimisation is validated.
Optimising costs in series production by means of a cost program is an important point to maximise profit. This will always be so because of constantly changing technologies, manufacturing processes as well as rapidly changing IT and the new possibilities it offers.
But it is also no secret that costs are better avoided, rather than optimised later. That's why implementing the previously mentioned topics (organisation, roles, processes, tools and methods) sustainably into your development process is important to us, in order to be able to effectively use the greatest cost leverage.
We analyse your existing product development process and make appropriate adjustments to anchor cost management in your development processes.
Effective cost management offers tremendous opportunities but presents companies with some challenges. Bring your cost management to the same level with us. Learn from us how to create cost transparency within a few days or weeks and how to set up effective and efficient cost programs and realise savings potentials of up to 30%.
Contact us and make cost management an integral part of your organisation.