Defining the benefits of SAP Product Lifecycle Costing


After completing this lesson, you will be able to:

  • Conduct a first product cost estimation in an early product development phase
  • Use a SAP S/4HANA backend integration to upload existing master data for a better cost estimation

Conduct a first cost estimation

In the early stage of product development, the engineering department need a tool that enables an initial cost estimate of the expected product costs. At this point, there is no bill of material, no material, or other master data with which a reliable product cost estimate would be possible.

In SAP Product Lifecycle Costing (PLC), there are three main options to create a cost estimation depending on how far you are in the product development cycle:

  • Preliminary cost estimate

    This use case is relevant for all companies that require cost information within a project, for a product that is being newly designed, or a product that is planned as the successor of an existing product. Usually, the manufacturer wants to evaluate the potential cost elements, breakdown, and drivers before manufacturing the project. Typically, they will iterate towards target costs along different milestones in their development project.

  • Quotation costing

    The second use case centers around cost calculation related to an inquiry from a customer, where a quote needs to be generated. This could be an inquiry for a complex, customer-specific machine, for a set of products, or even a solution consisting of multiple products, with varying quantities.

  • Lifecycle costing

    The third use case typically relates to an inquiry from a customer as well. However, in this case the cost of the product or solution needs to be calculated over a period of time in the future, taking into account varying volumes, component and raw material prices, and labor rates or currency fluctuations.

Simulation: Using SAP Product Lifecycle Costing

Please perform the following simulation "Using SAP Product Lifecycle Costing" to get a first impression on conducting a first product cost estimation.

Import from SAP S/4HANA

If you are working in PLC with a connected SAP S/4HANA system, you can import material BOMs or routings directly.

Watch the following video to get a first impression of what importing data from SAP S/4HANA into PLC could mean for your daily work.

Simulation: Using Product Lifecycle Costing with SAP S/4HANA backend integration

Please perform the following simulation Using Product Lifecycle Costing with SAP S/4HANA backend integration to get a first impression on importing master data into PLC. You supplement your project data with master data of a BOM and routing to obtain a better basis for your product cost calculation.

Log in to track your progress & complete quizzes