Identification of Cost Drivers

Target costing enables the early identification of cost drivers. The cost of a product comprises a wide range of cost-driving components. Cost drivers must initially be identified to define specific cost-cutting potentials.

First, the costs are determined at the sub-element level. Then the costs for the superordinate elements are consolidated and cost drivers are identified.

In the Structure view, the »% ProdC on Total ProdC« column directly shows you the share of production cost on the total production cost. The percentage indicator gives you an initial impression of the cost shares in BoM elements. This way, FACTON enables you to identify cost drivers to introduce cost-cutting measures.

FACTON helps you achieve your cost targets and positively influence the future product cost structure.

The share of the production costs on the total production costs is displayed for the following calculation elements:

• Should Cost Calculation
• Assembly
• Part
• Grouping
• Material
• Process
• Setup Process
• Production Line

You will find further information on the breakdown of absolute costs (see »Production Cost - Detailed« view schema) and on the cost share of the imputed sale price for identifying cost drivers (see »KPI« view schema) in the Key Figures view.