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MANUFACTURING
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Know the cost before the order closes.

Standard costing with live actual capture, variance decomposed into price, usage, rate and efficiency, WIP valuation posted from the work order, and product profitability by customer and channel.

The problem

Manufacturing cost is usually known accurately once a year, at stock-take, and estimated the rest of the time. Decisions about pricing, make-or-buy and product rationalisation are taken on the estimate.

A variance reported as a single unfavourable number tells nobody what to do. Decomposed into price, usage, rate and efficiency, each component has an owner who can act on it.

Core workflow

Standard to actual to decision.

01
Standard
Rolled from BOM, routing and work-centre rates.
02
Actual capture
Material, labour and machine time as incurred.
03
WIP
Valued and posted while the order is open.
04
Variance
Split by price, usage, rate and efficiency.
05
Order close
WIP relieved, unit cost updated, COGS posted.
06
Profitability
By product, customer, channel and plant.
What it covers

Costing model

Standard cost by revisionActual and average costingWork-centre and overhead ratesSubcontract costMulti-plant cost comparison

Variance

Material price and usageLabour rate and efficiencyOverhead absorptionScrap and rework costVariance by owner

Reporting

WIP valuationCost of goods soldProduct profitabilityMake-or-buy analysisInventory valuation
Operational outcomes
Live
Actual cost during the order
4
Variance components, not one number
−2.1%
Cost variance against standard
−7 days
Days to close manufacturing accounts

Ranges observed on Al Jawad engagements. Targets agreed in assessment.

Cost one product line properly.

We build the standard, capture one month of actual, and decompose the variance by cause.