Advantages of PCM

Advantages of Product Cost Management

During the last year and a half, Xavor has implemented Oracle’s Product Cost Management (PCM) for several different enterprise companies. According to Oracle, I’ve been told that throughout my career I’m actually leading the record for the most PCM implementations completed worldwide.

If you aren’t already familiar with PCM, like Agile PLM, it is a product lifecycle tool and not an engineering tool. It works from cradle to grave with PLM costing. PCM enables you to collaborate with suppliers and manage costs while completing product sourcing and price management within a secure product record in real time. It definitely makes life easier but does change your life. PCM however doesn’t create purchase orders, but it obtains the information to populate purchase orders.

With Xavor’s expertise with both the product (PC) and the overall purchasing process experience, we understand how to make the product work with our customer’s processes. We bring in the best in class technique and recommendations.

So, what are some of the advantages of PCM? The list is pretty extensive but here are just some of the advantages that come from the top of the mind:

  • The first thing is that it doesn’t clutter up the ERP system with data that may not ever go anyplace. For instance, Engineering can be designing a new product and use PCM to get RFQ’s to make decisions on what part to design.
  • PCM can do a lot of the costing analysis without using ERP. Since you are keeping this in Agile PLM, you aren’t muddling up things with the ERP data.
  • Engineering can make changes in the BOM that are automatically affected in PCM. This can help Engineering make decisions on costing and availability as they are getting ready to release the products.
  • All of the costing and availability can be related to a part/assembly and stored in PC. When viewing the history, you can see why certain decisions were made over time. With the ERP system, it typically only has the ability to view this quarter and next quarter but not all of the history.
  • Purchasing doesn’t need to use spreadsheets in order to get the job done. It’s easier to do.
  • When going through an AML (Approved Manufacturer List) and AVL (Approved Vendor List) and quality documents, you can do audits and verify financial information that is tied into the overall products. In addition, you can use an AML and AVL approved supplier list through RFQ’s (Request For Quote) with suppliers and it then allows the overall enterprise purchase to become complete.

How do we set ourselves apart from other PCM implementation partners?

Xavor brings not only implementation expertise, but we also bring our Cost Modeling Tool (CMT) which works right alongside PCM.  It is a lightweight and powerful way of analyzing product costs across the product value chain by involving Engineering, PMO, Purchasing, Finance and Product Managers in the modeling process. Xavor’s CMT allows you do a lot of “what-ifs” with your products. The “what-ifs” with this product do “end of life” and “what if scenarios.” In addition, this robust solution can integrate with your organization's PLM, PCM, ERP and MRP solution(s) to consolidate data across all BOMs where the part under review is used. 


Tom Nelson

Author: Tom Nelson

Tom Nelson is an SME in design and manufacturing business process systems – guiding companies on how to streamline and consolidate their business processes from inception through obsolescence. Tom’s involvement with Agile PLM dates to an early release of the product, and in fact he was among the first 10 customers of Agile. He has over 40 years of experience in all aspects of manufacturing and service companies: semiconductor, high-tech, health sciences, aerospace and more. A deep knowledge of operational processes allows him to implement best practices for the control and processing of corporate information. These practices include development, quality, regulatory, product costing and program management.