CIMdata PLM Industry Summary Online Archive

May 12, 2009

Product News

Centric Adds Product Profitability Planning Module to PLM Suite

Consumer goods and fashion companies seeking detailed product cost and gross margin information early in the product development process – before products launch – will gain this added visibility for the first time with the introduction of the Centric Product Profitability Planning module from Centric Software, Inc.

The new module, part of the Centric 8, Release 3 product lifecycle management (PLM) and sourcing suite, calculates complete product cost and gross margin information – including operating expenses, channel costs, royalties, shipping costs and GMROI – early in the product development process.

“The Product Profitability Planning module provides unprecedented insight into the potential financial success of new products,” says Chris Groves, CEO of Centric. “Companies can save up to millions of dollars by eliminating products with poor margins early in the development cycle, and concentrate their time and resources on those products most likely to provide the highest margins.”

The Centric Product Profitability Planning module also provides financial information down to any level of the bill of materials (BOM) as well as across all SKUs, channels and regions of business. Users across multiple departments can provide input and gain instant visibility to any changes in financial metrics.

Calculating and managing the fully loaded cost of a new product is difficult, explains Groves, since costs like royalties, cost of goods sold, marketing costs, freight costs and channel costs usually are captured by different departments in different systems and spreadsheets. As each new product potentially has multiple SKU variants and channels, the challenge becomes complex. Consequently, companies often fail to determine the true ROI before launching new products – and end up with unanticipated lower margins and product failures.

With this level of information available during early-stage development, marketing, sales and finance executives responsible for new-product profit-and-loss can cut losses, invest in winning products and channels, and focus on improving profitability,” concludes Groves.

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