American Axle & Manufacturing

American Axle & Manufacturing (AAM), a global supplier of driveline, metal forming, powertrain, and casting technologies for commercial and industrial automotive markets, faced mounting pressure as electrification and tightening fuel efficiency standards rapidly reshaped product complexity. The core difficulty was cost estimation at early design stages — precisely when product information such as 3D CAD data and technical specifications remained incomplete or entirely unknown. Purely parametric costing approaches, which rely on historical geometry or weight-based relationships, broke down without defined inputs, leaving cost engineers unable to produce reliable estimates when design decisions still had the highest leverage on final product economics.

AAM implemented Siemens Teamcenter Cost Management, a process- and database-driven bottom-up costing platform that operates independently of complete 3D geometry. Unlike parametric tools, Teamcenter Cost Management builds estimates from manufacturing process sequences, machine rates, and material databases — enabling credible cost modeling even when product specifications are still evolving. The system was deployed as a globally accessible platform, standardizing costing methodologies and calculation libraries across AAM's international cost engineering teams. Integration with existing PLM workflows allowed cost engineers to attach cost models directly to product variants, visualize target cost gaps from both product and process perspectives, and flag unprofitable configurations early — before tooling or supplier commitments were locked in.

AAM achieved meaningful cost reductions during early-stage product development — the phase where design changes are least expensive to implement. By enabling structured cost visibility before specifications are finalized, the platform allowed engineering teams to eliminate unprofitable variants before downstream commitments were made. Supplier collaboration improved substantially: transparent, process-level cost breakdowns gave AAM's teams a credible basis for supplier workshops, resulting in documented cost savings on purchased parts. Qualitatively, the shift from manual, siloed cost analysis to a shared global platform freed cost engineers to spend more time on value engineering and design support rather than spreadsheet reconciliation.

• Early cost visibility eliminated unprofitable variants before tooling commitments
• Supplier workshops backed by transparent cost data yielded negotiated savings
• Global platform standardization reduced duplicated effort across regional cost teams
• Engineers reallocated time from manual analysis to design optimization work

• Choose bottom-up over parametric costing when early-stage specs are incomplete — parametric models require geometry that simply doesn't exist at concept phase in automotive development.
• Standardize globally first — a shared database of process sequences and machine rates is the prerequisite for meaningful cross-site collaboration and benchmarking.
• Tie cost models to PLM objects so cost data follows the product record rather than living in disconnected spreadsheets.
• Use cost transparency as a supplier negotiation tool — process-level breakdowns shift conversations from opaque quotes to data-backed should-cost discussions.
• Implement before design freeze — the ROI on cost engineering tools is highest when findings can still influence architecture decisions.