Digital Week Ostwuerttemberg

As part of the Digital Week Ostwuerttemberg, the digiZ | Digitalisierungszentrum Ostwuerttemberg invited representatives from business, science and politics to actively exchange ideas about the digital transformation in industry from 31 January to 4 February 2022. At the beginning of the hybrid event, Joachim Schöffer, Managing Partner of 4cost GmbH, lectured about the increasing cost pressure in the industrial sector and how this can be effectively counteracted by using professional costing software.

In particular, the focus is on the cost transparency of the development and procurement process. Those who do not want to wait to see what a product will cost at the end of the day use opportunities to simulate the various cost scenarios with digital solutions in advance. The focus of particular interest are the early phases, or, as Mr Schöffer names them, the phases of ignorance, which buyers can already encounter in the inquiry process. In early concept and design phases, the manufacturing and, above all, the later costs of product use (LCC) are defined. Companies which are able to conduct a wide range of reliable cost scenarios simulations in early phases are benefitting to make the right business case decisions with no doubt.

How can such simulations be performed validly but with little effort? With well-known methods of spread-sheet based detailed calculations (bottom-up method), it is very difficult and almost impossible, to map and compare all scenarios for what-if considerations quickly and transparently. This can be remedied by innovative multi-dimensional cost models, such as those used in the costing software from 4cost. These models produce reliable cost results within seconds and can be used universally. It is essential that the models can be tailored to the required circumstances using comprehensible parameters that are known to everyone.

The cost models of 4cost GmbH have been used successfully for over 30 years. The continuously fine-tuning of the models to new circumstances through calibration and AI methods. Users of the 4cost costing software therefore work with up-to-date models to achieve always the highest possible cost accuracy. 4cost ensures that both the technical cost models parameters and the financial factors (surveys from the Federal Statistical Office, e.g., inflation rates, productivity figures, country figures, etc.) are adapted to the changing situations. This also includes new technologies, their optimization (maturity of the technology) and the cost reductions that may be achieved with them. An example is 3D printing. A few years ago, much higher production costs and poorer quality levels were common too. By optimizing the manufacturing processes, the machines and quality improvements within the manufacturing process, lower costs are achieved with higher quality. 4cost’s cost models take these factors into account.

The digital change is in progress. Now is the right time to implement such software solutions to increase cost efficiency. When you have cost clarity early on, you make the right decisions in good time and remain profitable in the long run. Knowing the product costs over the entire life cycle early on, brings decisive competitive advantages. Especially in turbulent times of disrupted supply chains and volatile material prices, it is imperative to be able to provide meaningful information about all scenarios at the push of a button. The costing software from 4cost makes this possible.