How to keep product costs under control during the product development phase

Keeping the cost of a product under control at the development stage is a complex process, particularly for highly engineered products with different hierarchical levels for their assemblies.

Written by
Missoun Team
Published on
February 2, 2024
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Maintaining control over product costs during the development phase is a paramount concern across industries. This challenge becomes particularly intricate when dealing with highly engineered products featuring intricate hierarchical bills of materials. As products evolve through the engineering process, bill of materials items may undergo numerous revisions or substitutions. These engineering changes inevitably affect not only the cost of individual assemblies but also the overall cost of the final product.

Moreover, an item specified in the engineering process may be sourced from various manufacturers or suppliers, leading to potential cost disparities, even for identical items. In times of economic volatility, when suppliers frequently adjust their pricing, production costs for the same product may fluctuate significantly within just a few months.

The Pitfalls of Spreadsheets:

Relying on spreadsheets to control product costs during development is ill-advised. Spreadsheets have inherent limitations when it comes to tracking and displaying a product's current cost and its historical variations.

Unleashing Control with Missoun:

Businesses leveraging the Missoun platform gain comprehensive visibility and control over their product costs throughout the development journey. This is achieved through robust management functions encompassing items, suppliers, materials, and their intricate relationships. Engineering items are linked to materials procured from suppliers, considering not only material costs but also labor expenses and indirect costs such as duties and taxes.

Items manufactured or assembled in-house are linked to a bill of materials, where their cost is intricately tied to the costs of individual components. Displaying an item's cost with a multi-level bill of materials involves a "roll-up" operation, summing the costs of items across all hierarchical levels while considering individual quantities.

Experience Cost Control Mastery:

Watch the video below to witness how the Missoun platform seamlessly manages the cost of items with multi-level bills of materials. Observe how engineering items are intricately paired with materials and individual cost entries, ensuring precise cost control during development.

Contact Us to Learn More:

To delve deeper into the world of 3D product visualization and discover how Missoun 3D CPQ can revolutionize your customer experience, do not hesitate to connect with us. We are more than happy to answer your questions and provide comprehensive information about our CPQ software.