Material costs for core substrates needed to run the extrusion production lines just jumped 20% more than anyone forecasted. Replacement substrates have a different viscosity which will most likely drive up higher scrap rates. That carefully calculated standard cost from last quarter? No longer actionable.
This scenario plays out weekly in modern manufacturing. Executives need answers: What does production actually cost right now? Not last month’s variance report. Not theoretical standards. The actual cost at this moment.
Legacy systems cannot provide these answers. They continue batching yesterday’s data while margins erode today.
The Hidden Tax Every Manufacturer Pays
Traditional costing systems operate retrospectively. Data accumulates across shifts, sometimes days, before analysis begins. Meanwhile, micro-losses compound invisibly throughout operations.
Operators spend twelve extra minutes adjusting equipment for material variations. No system captures that cost. Quality inspectors reject three units due to tolerance issues, logged eventually, costed never. Assembly teams consume 15% more fasteners compensating for supplier changes. These losses remain invisible until month-end variance reports reveal accumulated damage.
Deloitte research reveals manufacturers using batch-based costing experience 15-25% higher actual costs than reported during volatile periods. For $100M operations, that represents $25M in untracked cost erosion annually. Capital vanishing into operational black holes.
The solution requires eliminating gaps between occurrence and visibility. Real-time, activity-based costing fundamentally changes manufacturing economics.
DELMIA Apriso delivers transparency through event-driven architecture where every interaction becomes a costed event. Dynamic BOM/BOP integration captures actual consumption versus theoretical standards. True activity-based precision allocates costs to specific production activities instantly.
Based on big data collection and analysis, DELMIA Apriso helps us focus more on Lean improvement,” said William Sun, General Manager, BorgWarner.
How Real-Time Intelligence Changes Everything
Real-time systems compress response delays to minutes. Same deviation, yet impacts are kept fractional instead of forcing a full stop to production.
Consider the many practical scenarios manufacturers have to deal with every day. Material prices increase 8%. Batch systems reveal this through variance reports ten days later, and only after producing 10,000 units at negative margins. Real-time systems alert within hours, enabling immediate production mix adjustments, pricing modifications, or specification changes.
Manufacturers adopting real-time costing and analytics gain critical financial clarity and agility, achieving 4–10% profit margin improvements through real-time performance monitoring and predictive insights.
Real-time cost tracking also enables immediate detection of budget variances and cost deviations, empowering swift action instead of month-end delays. With live visibility into materials, labor, and overhead, finance and operations can sharpen pricing decisions and respond to disruptions within minutes rather than days.
Implementation Strategy Based on Proven Success
Successful real-time costing requires more than software deployment. Analysis of dozens of implementations reveals critical patterns.
High-variability products provide ideal starting points. Organizations should focus initial deployment where cost volatility causes maximum pain—typically custom or configured products with variable routings. Quick wins build organizational confidence while funding expansion.
Integration depth trumps breadth. Connecting DELMIA Apriso tightly with manufacturing ERP systems, embedded quality management modules, and mature procurement platforms delivers exponential value. While isolated real‑time costing yields modest gains, integrated intelligence fully transforms enterprise‑wide decision‑making while fusing cost clarity, quality assurance, and operations transparency into one strategic advantage.
Speed training matters most. Real-time visibility without rapid response capabilities wastes investment. Teams need new reflexes, understanding who acts when cost signals flash red, how quickly responses deploy, what escalation paths exist. Response time from deviation to correction becomes the critical KPI.
Measurement drives improvement. Organizations should track time from event to visibility, visibility to decision, and decision to implementation. These metrics predict value capture better than traditional cost variance reports. Cloud deployment accelerates everything. SaaS models reduce implementation time 60%, lower total cost of ownership 40%, and enable scaling without capital investment.
Why This Transformation Cannot Wait
Volatile markets reward organizations seeing clearly and responding instantly. Material costs fluctuate daily. Labor availability shifts hourly. Energy prices spike without warning.
Companies operating with batch-based costing navigate blindfolded through chaos. They drive using rearview mirrors while competitors with real-time visibility make precise adjustments based on current conditions.
The technology exists today. DELMIA Apriso provides proven capability for achieving cost transparency and control.
Manufacturing leaders face a clear choice. Continue operating blind while margins evaporate and competitors capitalize on delayed responses, or implement real-time costing capabilities that provide immediate visibility and control.
Every day without real-time cost visibility represents money left on the table. Volatile markets reward visibility. Visibility determines victory.
Louis Columbus is currently serving as a member of the DELMIA Marketing team, where he assists with DELMIAWorks and robotics solutions. Previous positions include product management at Ingram Cloud, product marketing at iBASEt, Plex Systems, senior analyst at AMR Research (now Gartner), marketing and business development at Cincom Systems, Ingram Micro, a SaaS start-up and at hardware companies. Professional experience includes marketing, product management, sales and industry analyst roles in the enterprise software and IT industries. Columbus' academic background includes an MBA from Pepperdine University and completion of the Strategic Marketing Management and Digital Marketing Programs at the Stanford University Graduate School of Business. He teaches MBA courses in international business, global competitive strategies, international market research, and capstone courses in strategic planning and market research. Columbus has taught at California State University, Fullerton: University of California, Irvine; Marymount University, and Webster University.