Product Cost Simulation

Production benchmarking and simulation is using SAP Analytics Cloud and SAP Cloud Platform to deliver you production calculations in very new and extremely flexible way. The solution can automatically load all your production portfolio including BoMs for all sub-products. Changes can be simulated for - raw material price, indirect material price, direct and indirect material usages and losses, material substitution, supplier substitution, new BOM creation - with direct result calculation in technical and financial measures.

Furthermore, we simulate also the full CO2 footprint of your production, starting from base raw materials through every production step. Our engine can also analyze and propose the CO2 optimization potentials in your production process and find the optimal CO2 / cost / vendor risk combination.


  • The main purpose of Product costing tool is to simulate the Product costs based on different input scenarios (raw material price, material / vendor replacement, new BoM introduction)
  • The tool can help business to manage their product costs and direct product margin impact in a very efficient way
  • Support of cross-functional collaboration from raw material procurement through product cost controlling to sales and margin management
  • Support of sustainability agenda including full CO2 footprint calculation and automated scenario optimization techniques
  • User friendly front –end allowing input of changes of raw material prices, usages, other parameters, add/delete/change raw materials, BOMs and Finished products

Full Process

Key Components

Key features

  • Guided process approach for users from procurement, finance, commercial and operations
  • Intuitive data input interface
  • Optimized ultra-fast calculation engine
  • Native standard dashboarding and reporting based on industry best practices
  • Extensive data security and authorization (as Bill of Materials are extra sensitive)
  • Robust technology platform capable of handling your full product portfolio
  • Automated optimization alternative suggestions
  • Predefined integration to SAP R/3, SAP S/4 HANA, SAP BW and open Odata interface to other data sources

Solution Benefits

  • Single and unified process from procurement of raw materials, through product cost controlling to final sales management and customer price setting
  • Significant shortening of time for production cost planning and forecasting processes
  • Immediate results - business can have instant information about the potential cost, CO2 footprint and margin impacts
  • Scenario, Version and multi-period approach (e.g. 18 months raw material price forecast)
  • Availability to cope with big data sizes
  • Process standardization through the business = single point of truth
  • Significant reduction of possibility of error in comparison to manual or semi-automated solutions
  • Higher data security through the proper set-up of access rights


  • Simulated Finished goods costs, in different scenarios and versions and in full detail (all components of each product BOM with its prices, usages, other parameters etc.)
  • Simulated impact to finished good margin and finished good full CO2 footprint
  • Output is available in different data formats and can be joined with other client’s reporting data to generate further insights (eg. linkage with Sales reporting to see margin impacts and support pricing process)
  • Which Raw materials contributed to total production costs changes
  • Which Finished goods are impacted by the Raw material changes and how the costs structure of Finished goods has changed
  • Which other attributes led to Production costs changes like material usages, indirect costs, volumes
  • Which components are needed for production of selected finished goods
  • Variance analysis – Price, Usage, Volume, CO2 and carbon footprint

Business decisions supported

  • Product pricing decisions
  • Cost optimization strategies
  • Production/process changes
  • Innovation process
  • Sustainability agenda (CO2 footprint)
  • Supply chain optimization process

Choose us

Deployment of the system in 6 months thanks to the prepared implementation template.

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