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Please find the strategy we would adopt to meet the
requirements below in detail. This may take little time as I have documented
with a well thought out plan in the projects best interest.
You will agree with me that these are not Day1 related
reports which will stop us from performing transactions in the system. Also it
will make more sense to test these analytical reports in a test instance where
we have replicated at least 15 days of Production data. Request you to go
through the below without a pre-conceived notion and then you will appreciate
the timelines.
A. Variance
Analysis
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Type
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Pre-requisites & Solution
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Proposed Timelines
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Pre-requisite
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Maintenance of Standard Costs:
We can maintain Standard Costs and Usage of each of the
component of Finished Goods (for all ingredients & resources) in the
system. The same can be copied every month / overwritten effective from any
month.
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Solution
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Cost Sheet Report – Standard Vis-à-vis Actuals
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Once the ‘Cost Sheet Report’ is ready,
you would be able to see the cost for a particular FG Item (across all
production batches for the month) vis-à-vis standard cost.
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06-Oct-2013
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Solution
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Variance Analysis – Material Cost Variances (Price
& Usage)
This I believe is a report whose format is shared by
Costing, but no efforts are put on this requirement as preliminary
things as discussed above need closure.
All the elements which are
required to arrive at the Material Cost variances are already
incorporated in the solution proposed by KPMG and are being captured in the
system. It is only a matter of reporting this data in the way you wish to see
& analyze. We will continuously engage the technical team to work on
these reports in parallel and make sure these reports are delivered before we
close the first month in ERP by 20th Nov 2013. By this the
technical team will have 30-40 days to deliver them while we continue working
on our go-live strategy and execute go-live.
Elements required to calculate Material Cost
Variances
Material price variance
= (standard price – actual price)*actual quantity
Material usage variance
= (Standard quantity – actual quantity)* standard price
(or)
= (Standard quantity for actual production – actual
quantity production) * standard price
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20-Nov-2013
Two weeks after go live.
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