Costing for New Products

New product costing is a regular phenomena for the costing of the new products and in any organizations this is very much required on a daily basis for the costing of the new proudcts,

Normally this costing is done outside the system in manual excel files by applying lot of manual formulae and assumptions,

Version maintenance is very much required for the new product costing process as it is important to check the costing with every change in assumptions and input mix. to get the product viable in the market

To have the complete visibility of new product costing with all the versions and assumptions for the costing and further production it is required to track the original version of the BOM and Conversion cost ratio

In the absence of the stable new product costing data from the beginning, if the actual / standard cost of the launched product is High or Low cannot be established and according to that if we are getting margin from the sale or not is not explanable to top managements.

Basic Costing Processes

The actual contribution earned after the commercial launch vs. the planned contribution can be compared through the system. to check whether the new product is profitable or not., and based on that some cost control mechanism can be adopted if the actual cost is higher than the planned cost

Approach :
In order to do the costing for the new product we will take one reference materials and copy the cost and details of the similar materails and make necessary changes in the newly launched product,

Material code , BOM, Routing and any of the master data in SAP is not required for the purpose of the new product costing in SAP

Assumptions:
Similar products should be made available with minimum changes in the cost of production

The cost differences for the new product costing sometimes could not be established and hence the same is a challange for the costing
Changes in the costing from the time of calculating the cost and at the time of real launch of the products.
Change in the requirements or specifications of the product which is to be launched for the new product costing.

New product costing sheet with micro level of detailing for the costing
SOP and Product documents for the module

We have the template for the new product costing processes and program for the costing sheet of the newly launched products.
Based on the requirements and business process of the costing we configure the process for the new product costing
Custom program is there to copy the cost of the available product to the new product costing

2 weeks for understanding the business process
1 week for preparing the solution documents based on the understanding and sign off
2 weeks for Realization and Testing the solutions in the DEV and Quality system of SAP
1 week for moving the TR To Production system and some amount of sample new product costing in Production systems

New product costing data once it is available in SAP System then the comparison of the same would be readily available and it would help in saving and controlling the cost in a better way. the compliance requirements w.r.t. the new product costing is also taken care with various versions of the costing. it will add value to the whole process for the amount of 5 to 6 Crore on annual basis for an organization. with turnover of 3000 Crore size

1.5 months to complete the project in a timebound manner with support: 2 Functional consultant and 1 ABAP Consultant for the entire works

M1 – Project start
M2 – Solution Document sign off
M3- UAT Sign off
M4 – Project Closure

INR 3,00,000/-

New Product Costing automation is the best thing can happen to us with just few lakhs