## Digital Costing System
### What It Is
A technology-driven system that uses AI, ML, and real-time data integration to ascertain and control costs across the value chain.
### Key Characteristics
| Feature | Description |
|---|---|
| Real-time data | Costs captured as they occur, not after |
| Integration | Linked with production, procurement, and inventory systems |
| Network interaction | Data shared with suppliers, customers, and the market |
### Data Provided by Digital Costing Systems
1. Cost incurred on a cost object
2. Time spent on each activity
3. Resource consumption data
4. Current market price of final product and raw materials
5. Lead time and material availability
6. Product demand and trend
### Benefits (AI & ML Enabled)
| Benefit | How it helps |
|---|---|
| Certainty in Cost Ascertainment | Precise cost allocation and apportionment |
| Incentive Planning | Time-spent data used to design productivity-linked incentives |
| Material Requirement Planning | Optimises procurement schedules; supports Just-in-Time |
| Non-Value-Added Activity Identification | Eliminates wasteful steps → cost savings |
| Real-Time Standards & Variance Measurement | Sets targets and flags deviations instantly |
| Marked-to-Market Cost Estimation | Uses current market prices for up-to-date cost estimates |
| Market Demand Prediction | Behaviour analytics guide budgeting and production planning |
| Informed Decision Making | Richer cost-behaviour analysis → better cost-benefit decisions |