logo_harmann_becker

To Website

Harman International - adopts Standardized Product Costing

The enterprise product-costing solution FACTON is helping HARMAN bring new developments to market quickly and with a precise understanding of their costs: long before production is launched for any given product, HARMAN uses FACTON to determine whether a profitable price can be attained. With FACTON, the company keeps an eye on costs during the entire life cycle. Changes in costing are documented automatically, and the system supports recalculations when there are adjustments. And because FACTON links up to the company’s existing SAP system and uses a central database, all departments and locations calculate costs in a uniform manner and with up-to-date data.

The Advantages

Standardization
Costs are calculated using the same standardized parameters everywhere in the world.

Lifetime costing
Costs are identified early on and monitored throughout the entire life cycle.

Speed
Large volumes of data on complex products are easy to manage and update.

IT integration
Reliable link to the existing SAP world.

 


“The very rapid pace of development requires a modern, flexible solution for the costing process.” Tom Reddig, Senior Manager Product Costing, HARMAN.

“We can identify cost drivers at a very early stage and work out economical alternatives. As a result, decisions on investment and management become faster, and they are made on the basis of a standardized, what the costing looks like at any point in time during a project.” Tom Reddig

The Company

HARMAN is one of the world’s leading suppliers of premium audio and infotainment products. The company designs, manufactures and markets special entertainment, information and communications systems for the automotive field. A large number of premium manufacturers in the automotive field depend on these products: there are now more than 20 million vehicles equipped with HARMAN audio and infotainment systems.

The Requirements

HARMAN wanted to replace its Excel-based costing system with one based on database technology so they would be able to calculate costs using the same standardized processes and methods throughout the company. One crucial prerequisite was the ability to integrate the new software into the SAP world that already existed at the company. The costing process had to begin in the development phase, which is where a great many of the costs are established. And because of the great complexity of the products, it was also important for the system to support a recalculation of costs when there are adjustments to individual components in the interest of reducing the effort and expense of the costing process.

The Project

HARMAN has been using the costing solution FACTON since 2010. The software was first implemented at its German headquarters in Karlsbad and in later stages brought to other locations of the company, which operates around the world. In autumn 2011, the system was rolled out in the US. The heart of FACTON is a central master database which guarantees that all locations and departments calculate costs in the same way and with the same data. This database contains all cost-relevant data such as the prices of purchased parts, cost centre charges or surcharges. Furthermore, the pool of data can be used to feed information from development, purchasing and production into a costing calculation in order to simulate various product structures and location costs. A “cost framework” can thus be created as the basis for investment decisions long before the start of production.

The system allows access rights to the product-costing data to be defined for each of the various user groups. Changes are documented automatically, which makes it possible to trace the life cycle of a calculation. If a part is changed or switched, FACTON supports a recalculation of the new cost structure. This is especially important to HARMAN in view of the great complexity of its products. FACTON was quickly and reliably integrated into the existing SAP world. After the implemantation, HARMAN verified the functionality and dependability of the system in the context of various pilot projects. To further increase the utility of the software for the whole company, HARMAN also intends to make use of the integrated Web reporting tool, through which analyses and forecasts can be viewed quickly and easily in a Web browser.