Combining parametric and bottom-up approaches to reduce the time for cost calculations by 95 percent

Addressing value chain challenges

ZF Friedrichshafen AG (ZF) is a global technology company that supplies advanced mobility products and systems for passenger cars, commercial vehicles and industrial technology to manufacturers and mobility providers. ZF electrifies a wide range of vehicle types, contributing to reducing emissions, protecting the climate and enhancing safe mobility. It also serves market segments such as construction and agricultural machinery, wind power, marine propulsion, rail drives and test systems.

Like many other companies, ZF is facing value chain challenges. These include declining availability of resources as well as rapid changes due to new technologies and materials. “As a global company, we not only have to be a leader in terms of our products but also in terms of our processes and tools,” says Simon Roth, cost engineering, ZF.

To meet this standard, ZF implemented Siemens Digital Industries Software’s Teamcenter® Product Cost Management solution, which is part of the Siemens Xcelerator business platform of software, hardware and services. ZF’s active users in cost engineering leverage the Siemens’ solution to calculate product and tool costs, including the product carbon footprint.

Expertise and innovation

ZF’s cost engineering is underpinned by technology cost engineers specializing in manufacturing technologies and product experts overseeing entire product groups and assemblies. However, finding experienced professionals in this domain is increasingly challenging and costly. Roth plays a pivotal role as the primary trainer and digitalization specialist, maintaining close contact with all Teamcenter Product Cost Management users.

Achieving strategic efficiency

Using Teamcenter Product Cost Management enables ZF to conduct in-depth analysis of materials and production methods, including external setup times in the production process. ZF conducts thousands of cost calculations a month. Consequently, there are recurring calculation processes. To automate the calculation process for recurring cost calculations, ZF adopted the Parametric Models Framework for Excel module as part of Teamcenter Product Cost Management. This module enables users to import expert knowledge from an Excel based technology cost model. Over two years, ZF has developed 40 technology cost models, capturing valuable intellectual property (IP). This innovation facilitates quick, automated calculations for standard components, enabling users to generate precise results without in-depth expertise.

Accelerating cost calculations

The user must enter just a few predefined parameters (for example, component size, material, quantity, manufacturing technology, etc.) into Teamcenter Product Cost Management. After all required information is entered, Teamcenter Product Cost Management interchanges data over the Parametric Models Framework for Excel API with the technology cost model. Consequently, Teamcenter Product Cost Management provides a detailed bottom-up cost calculation while taking the emission value into account. Based on the bottom-up calculation, ZF users run simulations and scenarios in Teamcenter Product Cost Management. They calculate variants and simulate a switch between manufacturing locations.

The technology-driven costing (TDC) calculators enable ZF to realize significant cost savings compared with common inbuilt parametric solutions.

“When using Teamcenter Product Cost Management to calculate component groups and individual components such as die-cast parts, cast iron, forged parts, there are no restrictions or limitations in developing new cost models,“ says Roth.

“By using Teamcenter Product Cost Management, we can drastically reduce calculation times by combining the parametric approach with the accuracy of a detailed, bottom-up cost calculation and keep knowledge and expertise in the company,” says Roth. Based on this streamlined process, bottom-up cost calculations are generated in just two to three minutes – a time saving exceeding 95 percent. In two years ZF has used the TDC framework to create over 2,400 calculations.

Flexibility and precision

After the technology-driven cost model is executed, all calculations can be manually adapted to the user’s requirements.

The Parametric Models Framework for Excel connects seamlessly with the ZF technology cost models, enabling efficient generation of cost results with minimal effort.

Preserving knowledge and accessibility

With the parametric approach, ZF captures expert knowledge in models, ensuring seamless knowledge transfer from experienced professionals to users without in-depth training. These models enable cost engineers to access reliable cost calculations without requiring extensive training or technical expertise. This means ZF product experts can use Teamcenter Product Cost Management to quickly access calculation results.

Emissions as a secondary currency

ZF has expanded Teamcenter Product Cost Management with Teamcenter Carbon Footprint Calculator software, addressing the growing importance of emissions in the industry. By integrating emission calculations into their parametric models, ZF ensures that carbon footprint transparency complements cost assessments. This dual focus enables ZF to explore greener alternatives in production technologies and energy use.

“Teamcenter Carbon Footprint Calculator is a great help,” says Roth. “We can tell customers the component costs €10 so they know whether it is expensive or cheap, a great deal or a bad deal. If we were to tell business partners that a component has 18 kilograms of emissions, it would be difficult for some to understand whether that is a little or a lot. With Teamcenter Product Cost Management, everyone also gains an understanding of emissions and first figures, enabling them to develop a feeling for emissions.”

Balancing costs and emissions

ZF continuously checks calculations to make sure they align with best practices. When possible, emissions are also reduced by leveraging new manufacturing technologies that produce less material waste and use less electricity. ZF navigates the cost-emission trade-off by leveraging the Teamcenter Product Cost Management data-driven insights. Although green energy and efficient technologies often incur higher costs, ZF mitigates these challenges with fact-based decision-making and collaborative discussions with customers and suppliers.

“With Teamcenter Product Cost Management, we have managed to bring transparency to costs and CO2e,” says Roth. ”By using facts and figures from Teamcenter, we can discuss optimizations and convince our customers and suppliers with realistic data. Using Teamcenter Product Cost Management will help the cost engineering and controlling departments seamlessly collaborate, enhancing data security, transparency, quality and the speed of decision-making.”

“Teamcenter Product Cost Management is our tool of choice to strengthen our position among the top cost engineering organizations in the industry and will enable us to further expand our horizons,” says Claus Ammon, vice president of cost engineering.

Recognizing excellence

ZF’s cost engineering also received an internal excellence award for digitalization and process automation. The live demonstration of a two- to three-minute bottom-up calculation showcased the transformative potential of Teamcenter Product Cost Management, earning recognition for its efficiency and impact.

Expanding use

ZF plans to extend the Teamcenter Product Cost Management rollout of the parametric calculators to the colleagues from the controlling department, amplifying its benefits globally. The payback period of creating the parametric is normally less than a year, underscoring its value to ZF.

ZF’s partnership with Siemens exemplifies the integration of advanced technology into cost engineering and environmental management. Using innovative tools like Teamcenter Product Cost Management, ZF has not only accelerated processes and preserved expertise but also embraced sustainability as a core business value.