PVM Target costing

Determine, design and achieve target costs

PVM Target Costing is a comprehensive, integrated cost management system. In target costing, the maximum costs and the resulting actions are defined at an early stage to create the prerequisite of achieving target costs during product development.

Target costing provides mandatory cost specifications
The target costing software is used from the beginning of product development to lay out the cost structures and product characteristics that are needed to meet market requirements early on; this applies to new and enhanced products, as well as product modifications. This enables the exertion of targeted influence on costs during the phase of development. Target costing sustainably increases efficiency during product development. Resource input needed to achieve cost, time and quality goals is minimized by ensuring that the right steps are taken first time round, preventing redundant services and process loops.

The company pools its strengths and minimizes resource wastage. Ultimately, this delivers better solutions with higher customer value.

PVM Target Costing. Your benefits.

  • Firm establishment of target costing as a permanent process
  • Implementation of an integrated cost management system to identify, design, realize and control target costs.
  • Resource input is focused and the number of variants reduced
  • Reduction in lead time thanks to clearly prescribed product properties and cost targets.
  • Simple and consistent application of the method throughout the company.

PVM Target Costing. The functions.

Target costs identification

Market data or price calculations are used to identify the target costs. The desired profit margin is deducted from the target prices in order to determine feasible market costs.

Target costs splitting

The costs are split based on the cost structure taken from a reference model. This produces absolute cost value per component. The target costs are assigned to the different assembly or component layers by splitting the target costs.

Target achievement

Measures aimed at optimization and structural change are used to close the target cost gap. Moreover, it is possible to define additional measures to optimize company processes and to create value, or to introduce preventive quality management.

Measurement tracking

Target costing comes with integrated tracking of measures for each target. This provides you with a clear overview of finished and incomplete measures at all times.

PVM Target Costing. Optional functions.

BOM management

BOM management is a key factor in the construction and production of each product. Complex parts lists can be defined for each product version and variant. They are an efficient and precise method of grouping parts list information and of describing individual characteristics of the parts used within a project. 

Value analysis

PVM Value analysis is a perfect complement to Target Costing. The combination of both methods does more than just optimize costs – it was developed to let you create the best possible products.

Price calculation

Price calculation includes aspects relating to the competition and interaction with the competition, lending suitable weight to price trends, competitor strategies and reference values for competitor products and other aspects.

Functions

  • Target costs identification
  • Target costs splitting 
  • Target achievement
  • Measurement tracking

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Factsheet