Optimizing quote calculation processes to reduce quote generation time by 40 percent

Making mobility safer and more sustainable

The automotive sector of the BENTELER Group is organized into two divisions: BENTELER Automotive Components and BENTELER Automotive Modules. As a development partner for the world’s leading automobile manufacturers, the two divisions work with around 20,000 employees in more than 20 countries to develop tailored solutions for their customers. Their product portfolio includes components and modules in areas like the chassis, body, engine and exhaust systems, as well as future technologies such as battery storage systems for electric vehicles. The company also supports customers along the entire value chain, from product ideation through development to production and assembly.

For a global manufacturing company like BENTELER, forecasts and cost analysis in financial planning and corporate management are prerequisites for evaluating new investments, project plans and quotation submissions and their financial effects.

The biggest challenge in the past was working with the right data and the right calculation method, format or version. In addition, the profitability calculation and the static calculation were different systems that required a lot of manual effort for data transfer. The old systems were more prone to errors and could no longer reflect the complexity of their business.

As a solution, the two divisions partnered with Siemens Digital Industries Software and used the Teamcenter® product cost management solution in 2014, which is part of the Siemens Xcelerator business platform of software, hardware and services. Using Teamcenter product cost management enables BENTELER to achieve uniform and early cost control throughout the entire product lifecycle.

Unifying data and streamlining calculation methods

Leveraging this solution unifies all enterprise cost information in a centralized database, ensuring that every employee works with the same data. This includes information from enterprise resource planning (ERP), product lifecycle management (PLM), computer-aided design (CAD), spreadsheets and external benchmark data. The system collects, edits, processes and represents the cost data in the application. This provides users with access to the valid, standardized and comparable basis of data they need to make solid product and investment decisions.

Using Teamcenter product cost management also defines standardized processes, calculation methods, calculation standards and calculation logic to promote a uniform understanding of costs and to compare results. With this solution, BENTELER can integrate all company areas involved in cost control, from development, production, purchasing and sales to control and top management, into the cost calculation at various touchpoints. Additionally, by using this solution, the company can calculate the development, product and manufacturing costs transparently across all phases of the product lifecycle and identify optimized potential faster thanks to cost transparency.

Calculating quotes

As price pressure, global competition and global projects increase, it is a competitive advantage to have precise and quickly generated quotation calculations. BENTELER’s customers often expect a quote two to three weeks after their first request. The requests differ by build-to-print and development-related requests.

For build-to-print requests, employees calculate and evaluate components and modules precisely according to customer specifications and plans.

For development-related requests, they first check exactly what the customer requests. They then collect all necessary information and define the project’s corresponding framework parameters. The development team must describe the product technically and create an engineering bill-of-materials (eBOM). This contains the basic information for the purchasing and production teams. From here, the purchasing team determines the cost via suppliers or using the purchase price analysis.

Simultaneously, the production team creates the work plan, compares possible production concepts and determines plant requirements. This also includes investing in new tools or additional personnel. The purchasing and manufacturing teams define creating depth of value using make-or-buy analysis. Finally, the manufacturing BOM (mBOM) is available, which contains materials, tools, work plans, etc. Leveraging Teamcenter product cost management plays a main role in calculating quotes since it ensures all cost-relevant data is compiled quickly and reliably, thus accelerating calculation creation.

“Using Teamcenter product cost management optimizes our quotation calculation processes, so we reduced quoting time by 40 percent,” says Thomas Kossak, a controller specialist at BENTELER Automotive Components.

Calculating profitability

The accounting team at BENTELER consolidates and checks the results concerning plausibility, competitiveness, opportunities and risks. The results are then represented in the Teamcenter product cost management profitability calculation. This is a comprehensive overall assessment that includes incurred costs, expected revenues, cash flows and individual key figures, for example, return on sales and capital. After management review, the project management and management teams decide whether to offer the project as calculated or if it needs optimization.

The management team usually needs analysis and simulations as a basis for making decisions, which requires a wealth of information. This includes quantity scenarios, currency fluctuations, payment times and discounts. Using Teamcenter product cost management, BENTELER can create certain scenarios and deliver the results quickly and reliably.

To examine the effects of long-term contractual relationships on submitting profitable quotes for a project period, companies can use a multidimensional what-if approach. Meaning, under what conditions is production profitable? How can you effectively manage cash flow development in cases where demand decreases or there is a supply chain delay?

“For reliable company management, using Teamcenter product cost management to model project costs provides the best conditions for comprehensively evaluating the opportunities and risks of long-term delivery agreements or new investments,” says Kossak.

Once approved, sales representatives can send the quote to the customer. Before placing the order, the customer can request changes and/or scenarios, requiring the quotation process to be repeated with appropriate adjustments.

In the event of subsequent changes, for example, due to changing customer requirements or premises, the company can use Teamcenter product cost management to automatically synchronize internal and external calculation data. This means that the calculation results remain comprehensible. This continual control option is particularly important for identifying who made changes and when. Further, each update’s influence on profitability becomes clearer. For example, users can derive arguments for price discussions. As a rule, BENTELER’s customers want to know exactly what makes up the sales price and ask for cost breakdowns. With Teamcenter product cost management, all relevant calculation data, such as material costs, manufacturing costs, overheads, etc., can be automatically filled into a cost breakdown form.

With Teamcenter product cost management, BENTELER can rapidly consolidate enterprise-wide cost data based on comprehensive bottom-up planning and has a reliable data source for strategically planning new business activities. With this streamlined solution, employees can concentrate more on their core activities, creating more capacity to optimize costs. This means the company can carry out more economic feasibility calculations, evaluate more scenarios and question more supplier quotes, creating additional time to work on cost levers. By constantly analyzing cost structures and benchmarks and evaluating optimization measures such as purchasing part price reduction, cycle time improvement, material optimi- zation, etc., manufacturing costs can be reduced sustainably.

Combining sustainability and profitability

The pressure on original equipment manufacturers (OEMs) to reduce the carbon dioxide (CO2) emissions of their vehicles to comply with regulatory requirements has been increasing for several years. This stricter CO2 regulation for OEMs also impacts suppliers like BENTELER. The company calculates the CO2 emissions for modules and components upon customer request. “Previously, the main focus for customer projects was on the cost criteria; however, this now includes the product’s CO2 footprint,” says Kossak.

BENTELER and its customers are increasingly interested in the CO2 footprint of materials and manufacturing processes to achieve their own sustainability goals. Therefore, the company combines sustainability and profitability by integrating the product’s CO2 assessment into existing structures and processes for calculating costs. For this, they use the additional module Teamcenter carbon footprint calculator from Siemens. With this solution, BENTELER can measure, simulate and reduce its product’s CO2 footprint early in the development phase.

Leveraging the mBOM in Teamcenter product cost management, the company can determine the amount of greenhouse gases each BOM element releases. The solution considers all processes, from extracting raw or recycled materials and producing preliminary products to producing the final product (cradle-to-gate).

“Using the Teamcenter product cost management solution ensures greater efficiency, as we can calculate the costs and CO2 footprint for a large number of our products along their value chain,” says Kossak. “We can leverage Teamcenter to analyze the impact as a trade-off between the CO2 footprint, profit margin and customer value.”

Both divisions, BENTELER Automotive Components and BENTELER Automotive Modules, continue to effectively use Teamcenter product cost management to improve cost transparency and its carbon footprint. Leveraging this solution will continue to support cross-departmental and cross-location collaboration, increase efficiency for making fact-based decisions and accelerate the quotation process. Managers receive optimal support thanks to the broad scope of features such as cost, carbon footprint and investment calculation.