Raul Morales Business Development 2 Sugar Historical Prices 3 Corn Historical Prices 4 Coffee Historical Prices 5 Oil Historical Prices 6 Exchange Rate Changes 7 Back to Base 8 We see new external factors affecting business ID: 130724
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Slide1
Real Costing
Raul MoralesBusiness Development Slide2
2Slide3
Sugar Historical Prices
3Slide4
Corn Historical Prices
4Slide5
Coffee Historical Prices
5Slide6
Oil Historical Prices
6Slide7
Exchange Rate Changes
7Slide8
Back to Base
8Slide9
We see new external factors affecting business
Globalization – plants in different locations Exchange rates fluctuations – markets integration are changing exchange rates in real timeAutomation – different plants, different productivity
Logistics integration - new routes, several vendor options and cost fluctuations Energy – oil prices and energy prices are changingCommodities – raw material price is changing daily Risk and Hedge Management 9Slide10
10
Learning Points
What is an economic event?
Nature
Date
Amount
Now technology is allowing to register economic events in real time and apply for two important objectives:
Legal requirement, Banks, Stockholders, Government
Monthly, Average or Standard, Not accurate for decision Making
Management decision making process
Real cost, Trustable informationSlide11
Detailed Standard
Cost x Real Cost
Global Standard Cost per Material and Plant MonthMaterial Ledger is not activatedNo Real Raw Material variations
No Real Labor variations
No Distributed Overhead per plant
No General Manufacturing Costs
No Multilevel Actual Products Real
No Finished Products
No Multicurrency
No tools to adjust planned
11
Detailed Monthly Real Cost per Material and Plant
Activated
SAP Material Ledger
Real Raw Material variations
Real Labor variations
Real Overhead per plant
General Manufacturing Costs
Multilevel Actual Products Real
Finished Products
Multicurrency
Adjust of planned near of realSlide12
12
Material Ledger/Actual Costing
Carry material prices in Multicurrency and actual costing
Up 3 currencies/valuations
Covers:
Inflation
Exchange Rates
Carry your inventories in 3 different valuations
Legal Valuation
Valuation for reporting
Profit center valuation
Actual Costing calculates an actual price for each material
Valuation using a moving average price results in the following:
Goods
receipts are posted at the goods receipt value.
The
price in the material master is adjusted to the delivered
priceSlide13
MARKETING
QUALITY
LOGISTICS
TECHNOLOGY
HUMAN CAPITAL
CUSTOMER SERVICE
Ohter
Profitability
Analysis
Revenue (+)
Cogs (-)
= GM
Overhead (-)
=EBITDASlide14
It is not an ERP activation it is a culture change
Real costing requires:Material Ledger activation/Actual CostProcess review – procurement, production, warehouse management, transportation, sales, profitability analysis
Master data review – materials, bill of material, final products, co products, routesNew functionalities activation – material ledger, standard transportation, bill of material, standard warehouses, production ordersStrategic understanding of Supply Chain Process 14Slide15
Material Ledger
15Slide16
Actual Costing
16Slide17
Profitability Analysis
17Slide18
Product Costing Planning
18Slide19
Actual Cost Component Split
19Slide20
Plant Price
20Slide21
Material Price Analysis
21Slide22
Material Price Analysis
22Slide23
23Slide24
Price Analysis
24Slide25
Integrating Economic Events
Trustable information for decision making processCritical information available in real timeProcess automationFocus on process improvement
Scalable for more complex costing models25Slide26
Colombian Coffee
Founded in1927 Coffee Producers
UnionNon Profit OrganzationConsidered the best coffee around
the
world
Supporting
more
than
500k
families
1,000 SAP
Users
Version
5.0
New
controlling
culture,
based
on
Real
Cost
and
Shared
Services
26Slide27
Large Corn Ingredients Company
More than 2,000 SAP uses10 production plantsMexico, USA and CanadaGuadalajara Mexico and
ChicagoReview current Costing ModelActivating Material Ledger and Product Costing27Slide28
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Thank you for participating.
+1 404 783 1539
raul.morales@softtek.com