to-be worshop bpo - co

7/28/2019 To-Be Worshop BPO - CO

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TO-BE WORKSHOP

Presentation to BPO

Controlling

Nov 17, 2008


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Page 2 Conf ident ia l

AGENDA

09:00am-12:00am PC Session

Key Data for PC Cost Component

Valuation of Cost Component Overall Process on PC

Overall Process

Standard Cost Calculation

Actual Cost Calculation

Analysis of Costing Result

02:00pm-03:45pm Cost Center Session

Cost Center Structure Overall Process on Cost Center Budget control process

Month-end process

04:00pm-05:00pm PA Session

Key Data for PA Overall Process for PA

The reporting result


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TO-BE WORKSHOP

Product Costing


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Changes and Benefits


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Main Component of Product Costing

Standard cost of produced material

Verify Master Data:

BOM/ Routing

BOM Routing

Calculated Cost of

Material/Activity/OH

Product Cost Planning Cost Object Controlling

Production Oder No. xxx

Material Cost xxx

Activity Cost xxxOverhead Cost xxx

Month-End Closing

Record Planned Cost/Actual Cost

Activity Price Revalue Work in Process Variances Settlement

Actual cost/variance per Order


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Cost Components

Cost of Production

Direct Material Cost Main Material

Sub Material

Scrap (Re-usable components)

Package

Internal Semi Finished Goods

External Semi Finished Goods

Chemical & Spare Part

Direct Activity Cost

Direct Labor

Machine Depreciation

Mold Depreciation

Overhead Cost

Electric Expense

Indirect Salary Expense

Indirect Material Expense

Tools and Instrument Expense

Uniform, Labor Safety, Promotional Stuff

Indirect Depreciation

Others

Quantity Structure

Valuation Structure


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Cost Components Valuation - Material

Price Data Price on Material MasterMaterial component Standard Cost Actual CostOutsourcing Material Moving Price at the time

running STD cost

Moving Price at the time

goods issued

Scrap Standard Price Standard Price

Semi FG

(In-house Produced)

Standard Price Standard Price

FG Standard Price Standard Price

Quantity Data BOM and Actual Usage on Production OrderMaterial component Standard Cost Actual Cost

Raw Material BOM QTY Actual usage QTY

Scrap BOM QTY Actual usage QTY

Semi FG BOM QTY Actual usage QTY

FG BOM QTY Actual usage QTY


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Cost Components Valuation - Activity

Price Data Price of ActivityStandard Cost Actual Cost

Direct Labor (HR) Planning price with version 0

on each period

Actual price

Machine Depreciation (HR) Planning price with version 0

on each period

Actual price

Mold Depreciation (HR) Planning price with version 0

on each period

Actual price

Quantity Data Routing and Actual ConfirmedStandard Cost Actual Cost

Direct labor (HR) Routing time Actual time confirmed

Machine depreciation (HR) Routing time Actual time confirmed

Mold depreciation (HR) Routing time Actual time confirmed

** Activity Unit confirmed in MIN and translate to HR for calculate price


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Cost Components Valuation - Overhead

Price Data OH Rate MaintenanceStandard Cost Actual Cost

Overhead Rate Plan Rate Actual Rate

Quantity Data (Overhead Cost Driver)

Overhead Type Allocation based

Electric Capacity and machine time

Indirect salary Direct labor time

Indirect material Main material value

Tools and equipment Machine time

Uniform, Labor safety, Promotional stuff Direct labor time

Indirect deprecation Main material value (for pressing &

grinding)

Labor time (assembling/glue sticking/water color/ ink)

Machine time (printing & wax)

Others Main material value


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Costing Variant


Expect to:

Compare alternative cost estimates to optimize your business decisions Simulate the cost impact of changing one production factor or modifying the

amount of overhead allocated to a product

Design the variants fit your need:

Variant version 0: Std. Cost Est. Period Cost

real version, use for your actualcosting

Variant version 1: Std. Cost Est. Plan plan version 1 (before move to real

version)

Variant 0 Variant 1

Variance 1 use thesame condition but

use for running to

compare with old

(actual)


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Overall Process of Product Costing

Calculate standard

cost for new product

Calculate standard

cost for current product

Update standard price

in material master

Create production order

Allocation process on

cost center

Calculate production

order with actual price

Cost of Production Order

Confirm

material usage

Confirm activity

usage

Confirm output

unit

Record daily expenses

Calculate production

variance

Post variances to FI

Adjust variance to

COGS/Inventory

Calculate WIP

PC

PC

PC

CCA

FI

PC PP

PP

PC PC

FI

FI


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DetailSTD cost for new product


Product Cost Estimates for New Products

3

Change Base

Planning Object

Start End

CO

1

Create Base

Planning Object

2

Analyze costing

results

4

Monitor the Base

Planning Object


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DetailSTD cost for current product

Standard Cost estimate calculation

2

Create BOM

7

Creating a cost

estimate

CO

PP 4

Create Routing

5

Create Production

Version for Material

3

Activity type prices

planning

(COF301)

6

Quantity Overhead

rates maintenance

(COF302)

Start 1

New

Material creation

MM

8

SAP valuates the

quantity structure &

calculates overhead to

create the estimate

9

Analyze costing

results

End10

Save cost estimate


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Main Comps.See how they work

OH

allocate

allocate


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Confident ial

Detail ProcessActual Cost Calculation

C

O

Production Order Processing for Semi-finished / Finished Goods

Start 1

Create Production

Order

PP

M

M

FI

2

Goods issue

3

Day-end Activity

confirmation

4

Day-end

Goods issue

Backflush

5

Day-end

Goods receipt from

Production

7Collect expense data

(COF101)

During month Month-end

10

Actual Overhead

allocation (COF308)

9

Re-valuate

Production Order

at Actual Price

12

Calculate

variance

13

Setlementto FI

6

Month-end

Goods receipt from

Production

11

Calculate

WIP

Production

Order

completed?YES

N

O

8

Activity Actual Price

calculation (COF307)


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Analysis of Costing Result

80

10

14

100

Variances

4

Actual cost

Standard

cost

Total Variance

Input Quantity

Output SideInput Side

Resource Usage

Input Price

Remaining

Lot Size

Output Price


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Variance AnalysisSample Data


Component Price QTY CostMaterial 10/KG 100 KG 1000

Labor 20/HR 2 HR 40

Total 1040

Standard Cost @ Lot size = 100 KG

Component Price QTY Cost

Material 10/KG 130 KG 1300

Labor 24/HR 2 HR 48

Total 1348

Actual Cost @ Lot size = 120 KG

Price QTY Cost10/KG 120 KG 1200

20/HR 2 .4 HR 48

1248

Target Cost ( 120 KG)

Variance compare between

Target cost / Actual cost


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Variance Analysis - Calculation


Price Variance : different betweenTarget PriceandActual Price

= [ (actual cost/actual qty) - (target cost / target qty)] * actual qty

QTY Variance : different between Target Qty. andActual Qty.

= [actual qty- target qty] * [target cost/target qty]

Resource Usage Variance : different from actual usage ofunplanned

Activities / Materials

= actual cost of unplanned materials / activities

Remaining Variance : the remaining variances on input side

Output Price Variance : different betweenTarget Price andActual Price on

Credit side( in case of change STD cost after received stock from production

order)

Lot Size Variance : different from Lot size ofTarget QTY and Actual QTY

Remaining Variance : the remaining variances on output side


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TO-BE WORKSHOP

Cost Center Controlling


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Changes and Benefits


Current Process SAP Process Benefit

No cost center. Have a cost center in the system

Must specify cost center that is

the owner of cost.

Can control/monitoring cost by

cost center

Should allocate indirect cost to

related cost center.

Can know actual cost of that

cost center and can separate

between direct/indirect cost after

allocation process

Cost centerstructure must bestandardized and clearly defined

for all units under Thien Long

Group

Easy to create new cost centerCan view cost data by level of

structure

Easy to compare/group cost

between different company

Any changing in cost center

structure will be covering in

standard report.


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Cost ElementsPrimary and Secondary


Whats Cost Elements

Cost elements classify any kinds of consumptions of an organization within a controlling area and there

are 2 kinds of cost elements:

Primary Cost Elements: Corresponding with Profit & Loss GL on financial statement

Secondary Cost Elements: Not corresponding with external financial statement, use for internal

costing/controlling purpose


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Cost Center Structure

X X X X X X

CompanyCode

Functionalcategory

Group running (2 digits)

Sub running (2 digits)

CompanyCode

1 Nam Thien Long

2 Thien Long Hoan Cau

3 Thien Long Long Thanh

Functionalcategory

1 Management / Center

2 Administrative

3 Sales and Marketing

4 Production

6 digits


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Cost Center StructureNam Thien Long

As admin.

group


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Cost Center StructureThien Long Hoan Cau

As admin.

group


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Cost Center StructureThien Long Long Thanh


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Allocation FlowAdministrative Cost


Financial expense

Corporate management expense

Direct Corporate

management expense

All Costs

(Direct & Indirect Costs)

All Costs

(Direct & Indirect Costs)


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Allocation BasedAdministrative Cost


Sender Sender Cost Element Allocation Base

Allocate Direct Cost from Management Group

Financial and InvestingActivities Financial Expense (635) depend on situation

Management / Center All Corporate Management Expense (642)

-6421 Employee Expense actual salary amount - of previous

month

-6422 Material Expense head count on other department

-6423 Tools & Stationary head count on other department

-6424 Asset Depreciation Area of each department

-6425 Tax / Fee / Charge head count on other department

-6427 Outside Service Expense head count on other department

-6428 Others Expense head count on other department

Allocate Direct Cost from Admin Dept to Other Department

Admin & HR All Corporate Management Expense (642) head count on other department

Finance & Accounting All Corporate Management Expense (642) ** same criteria as MGT

Internal Audit Committee All Corporate Management Expense (642) ** same criteria as MGT

Total Quality MGT All Corporate Management Expense (642) ** same criteria as MGT

Procurement All Corporate Management Expense (642) Value of PO on the period

IT All Corporate Management Expense (642) Number of PC and Notebook

Business Development All Corporate Management Expense (642) ** same criteria as MGT

i i i i


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Allocation BasedAdministrative Cost


Allocate from Admin to Every Cost Center in Sales (not allocate to production)

All cost center in Group

"Admin"

All Corporate Management Expense (642) allocate by sales amt

allocate by COGS* can change the allocation base

Indirect Cost From Financial &Investing

Activities (C42101)

allocate by sales amt

allocate by COGS

* can change the allocation base

Indirect Cost From MGT/Center (C42102) allocate by sales amt

allocate by COGS

* can change the allocation baseIndirect Cost form Admin Dept (C422xx) allocate by sales amt

allocate by COGS


Indirect Cost form Research &

Development Group

allocate by sales amt

allocate by COGS


Indirect Cost from Marketing Group /Logistic Group

** For TLHC

allocate by sales amtallocate by COGS


All ti Fl P d ti C t


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Allocation FlowProduction Cost


Production Overhead

Direct Costs

Indirect Costs (Overhead)

Direct Costs


All Costs

Direct Costs


All ti B d P d ti C t


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Allocation BasedProduction Cost


Sender Sender Cost Element Allocation Base

Allocate from Production Admin to Every Production Cost Center

Production Admin -6271 Salary expenses head count on other department

-6272 Material expenses head count on other department

-6273 Tool and instrument expenses head count on other department

-6274 Depreciation expenses Area of each department

-6275 Promotional Stuff head count on other department

-6276 Utility Expense Machine Time

-6277 Outside service expenses head count on other department

-6278 Other expenses head count on other department

Allocate from Production Support to Real Production Unit

Quality Control (for internal) Production Overhead (627) SKU

Planning Production Overhead (627) SKU

Automation & Maintenance Production Overhead (627) Maintenance & downtime (HOUR)

Allocate from Mold Unit to Production Order

Mold Techical Staff Production Overhead (627) % of Time using for fixing for mold

using on each work centerMold Team Lead & supervisor

Allocate Remaining Cost from Mold Unit to Internal Order

Mold Techical Staff Production Overhead (627) Time using for each mold (IO)

Mold Team Lead & supervisor

I t l O d d B d t C t l


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Internal Order and Budget Control


Code Description Purpose Coding

Format

Budget

ControlZ1X1

Z1X2

Z1X3

Purchase new asset

Own production (mold)

Major Repair

Use for capture construction in

progress (include mold)

1X1xxxxxxx

1X2xxxxxxx

1X3xxxxxxx

IO

Z2X0 New Projects Use to collect the cost that

occurs for new product launch

2Xxxxxxxxx CCTR

Z300 Cost Center Investment Use for budget monitoring/control

for the cost center investment

(cost center

code)

IO

Z9X0 Others For special event (such as trip,

road show)

9Xxxxxxxxx CCTR

X = first digit of company code

D t il f B d t C t l


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Detail of Budget Control


Budget for Expenses

(Budget on Cost Center)

Planning Cost Center

Expense by GL

Copy detail planning to budget

Expenses

Special Event (IO)

Others / Special Events (IO)

Check availability Budget

Budget for Investments

Planning individual

Investment

On Total Value

Purchase Complete Asset

Check availability Budget

Separate Budget

Availability Check at Total Amount

Tolerance limitReach 95% alert warningReach 105% alert error

Asset Under Construction

Fl f B d ti C t l E B d t


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Conf ident ia l

Flow of Budgeting ControlExpense Budget

Every Department Planning

Expense for Next Year

Upload into SAP

(via Cost Center)CCA

Copy to verision 0

Compare / Check with

Historical Data

(Optional Task)

Revise plan data version 0

CCA

CCA

Transfer plan version 0

to BudgetCCA

Every Department Adjust

Planning Expense

System will check budget

every department

every department

CO Accountant

CO Accountant

Chief Accountant

CO Accountant

informthechanges


Historical Data

Expense

over

budget ?

FIPOPR

Send approved of budget

supplement

requested department

Supplement budget

CO Accountant

YES

NOCarry forward Commitment

To next year

CO Accountant

Year End

Fl f B d ti C t l I t t B d t


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Conf ident ia l

Flow of Budgeting ControlInvestment Budget

Every Department Planning

Investment for Next Year

Upload into SAP

(via IO)CCA

Copy to verision 0


Historical Data(Optional Task)

Revise plan data version 0

CCA

CCA

Transfer plan version 0

to BudgetCCA

Every Department AdjustPlanning Investment

System will check budget

every department

every department

CO Accountant

CO Accountant

Chief Accountant

CO Accountant

informthechanges


Historical Data

Expense

over

budget ?

FIPOPR

Send approved of budget

supplement

requested department

Supplement budget

CO Accountant

YES

NO

Carry forward Commitment

To next year

CO Accountant

Year End


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TO-BE WORKSHOP

Profitability Analysis

Profitability Characteristic


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Profitability Characteristic

Sales Activity Customer Product

Sales Organization

Distribution Channel

Sales Office

Sales Group

Sales District

Individual Customer

Customer Industry

Customer Region

Individual Product

Material Group

Can analyze value by GL


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Reporting Result PL by Customer/Product


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Reporting ResultPL by Customer/Product

Report (can view by GL) By customer By Product Type

Main RevenueTrading Goods (Domestic/Foreign)

Finished Goods (Domestic/Foreign)

Intercompany Sales

Others Materials Sales (Domestic/Foreign)

Direct from Billing Direct from Billing

SalesDeduct [ - ]

Trading Goods (Domestic/Foreign)

Finished Goods (Domestic/Foreign)

Intercompany Sales



Discount (Yearly/Monthly, Rebate) Define on each

Transaction

Define on each

Transaction

Return - Trading Goods (Domestic/Foreign)

Return - Finished Goods (Domestic/Foreign)

Return - Intercompany SalesReturn - Others Materials Sales (Domestic/Foreign)


Net Revenue

Reporting Result PL by Customer/Product


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P 41 C f id t i l

Reporting ResultPL by Customer/Product

Report (can view by GL) By customer By Product Type

Cost of Goods Sold [ - ]

Trading Goods (Domestic/Foreign)Finished Goods (Domestic/Foreign)

Intercompany Sales


Direct from Delivery Direct from

Delivery

Gross Margin

Operational Cost [ - ]

Selling Expense.

Transportation Expense (Define Directly)

.

Corporate Management Expense

Allocate by

Sales QTYSales AMT

COGS

Allocate by

Sales QTYSales AMT

COGS

Net Revenue

to-be worshop bpo - co

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