From design to calculation – why networked systems make all the difference to profitability

In product development, up to 80 percent of the subsequent costs are already determined in the design phase. Nevertheless, cost evaluation often takes place shortly before series production begins – too late to take countermeasures. The consequences are costly adjustments, additional costs, and decisions based on uncertain data.

The integration of Product Lifecycle Management (PLM) and Enterprise Product Costing (EPC) creates a continuous flow of information between development and cost engineering as the basis for automated processes and informed decisions.

The blind spot in product development

Digital tools such as CAD or PLM systems have long been standard in development departments. Nevertheless, the topic of costs is often considered in isolation. While engineers work on product design, cost engineering calculates in parallel in separate applications without a direct connection to the current development status.

This fragmentation of systems leads to typical problems:

1. Manual BOM handling: Parts lists are transferred manually, which is error-prone and time-consuming.
2. Data inconsistencies and silos: Multiple versions circulate simultaneously, with no synchronization.
3. Version chaos: Different development stages make traceability difficult.
4. Lack of a basis for decision-making: Management decisions are based on incomplete data.
5. Late cost consideration: Cost drivers are only recognized when changes become expensive.

These points show that without integrated systems, cost engineering remains reactive and error-prone. Manual processes and isolated data prevent necessary decisions from being made early in product development.

From data chaos to a single source of truth

An integrated PLM–EPC environment solves these problems at their root. Automated interfaces transfer parts lists from PLM systems to the EPC solution without errors and in a version-secure manner. This creates a single source of truth that combines both technical and business perspectives.

This makes "design-to-cost" a reality. Cost aspects are incorporated into development right from the start. Changes are automatically displayed, and every design decision can be evaluated in terms of its economic impact.

Automation as a new lever in cost engineering

For cost engineers, the automation of systems marks a paradigm shift. Where data used to be maintained manually, the steps now run seamlessly in the background. Automated imports transfer parts lists directly from PLM to EPC, while rule-based updates and version comparisons immediately indicate where action is needed.

This is how engineering and cost engineering work more closely together: costs are incorporated into the development process in real time, and decisions are made jointly based on a central database.

Practical example: PLM and FACTON EPC working together

A typical manufacturing workflow illustrates how integrated cost engineering works in practice.

Step 1 – Create a product cost project The cost engineer starts a new project in FACTON EPC and sets targets and cost specifications. In doing so, they define the structure for tracking costs throughout the product lifecycle. Early coordination of engineering and cost targets reduces subsequent iteration loops and creates planning reliability.

Step 2 – Create product cost bill of materials The development department creates the development bill of materials (BOM) in the PLM system. The BOM is automatically imported into FACTON EPC and enriched with process data, cycle times, and cost centers. In this way, the bill of materials functions consistently and transparently as a central link between design and cost analysis.

Step 3 – Calculate design alternatives Cost engineering validates the bill of materials in FACTON EPC and can evaluate multiple design alternatives. FACTON EPC performs cost simulations for each option and immediately shows the impact of design changes.

Step 4 – Approve the preferred variant The interdisciplinary team from engineering, cost engineering, and controlling evaluates the available alternatives and selects the most economically viable
design. The selected design is cost-validated and clearly documented by all relevant stakeholders. The risks of expensive redesigns or unexpected costs are significantly reduced.

Step 5 – Build a complete cost model The teams expand the approved bill of materials into a complete product cost model that includes assembly, testing, and overhead costs. This gives engineering an early overview of all costs—from individual components to the finished product—and shows how design decisions affect profitability.

Step 6 – Perform target/actual comparison The teams compare calculated cost drivers such as labor time, machine utilization, and material consumption with target and benchmark data. The structured comparison reveals deviations and simplifies analyses of cost developments across product series or variants. Companies proactively control costs and keep profitability on track.

Measurable benefits in cost engineering

The integration of PLM and EPC strengthens collaboration between engineering and cost engineering throughout the product development process:

• Shared database: Automated data flows seamlessly connect design and cost data.
• Early cost transparency: Engineering and cost engineering evaluate costs as early as the design stage – not just in series production.
• Traceable changes: Every adjustment in the design is considered in the calculation.
• Faster development: Automated workflows and coordinated processes shorten development cycles.
• Informed decisions: Decisions are based on consistent and reliable cost data.

Conclusion: Know early on what a product costs – and make better decisions

Integrating PLM and EPC creates a new level of quality and speed in engineering and cost engineering. Companies benefit twice over: they reduce costs and risks – and gain speed and security. Knowing early on what a product costs enables you to make better decisions – and remain competitive in a market where every hour and every euro counts.