Solutions for the Manufacturing Industry
Solutions for the Manufacturing Industry
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| Related Case Study |
Having encountered challenges with spreadsheets, EJ USA, a leading manufacturer of construction castings, fire hydrants, tree grates, and more, used Prophix to revamp their financial processes. Over the years, EJ further developed their Prophix solution and began to mathematically model their company's production, distribution, and sales, constantly evaluating the health of their growing operations.
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Manufacturing organizations focused on process manufacturing and/or discrete manufacturing will continuously be affected either positively or negatively by consumer demand. Regardless if the transaction is business-to-business or business-to-consumer, the profitability of individual companies depends on efficient production and distribution alongside the potentially shifting demand for the end product.
With multiple factors affecting the manufacturing process, it has become more essential than ever to consistently monitor and plan for corporate growth as changes in demand can sometimes be felt immediately. Volatile consumer spending, competition for low-cost imports, large R&D spending, unstable raw material costs, lower skilled labor pools, increasing government regulations and dependence on few large customers (80/20 rule) can all quickly change the planned direction of the company and ultimately effect the bottom line. To minimize the effect of macro level socio-economic changes on corporate profit and to compete effectively, manufacturing companies require innovative solutions to ensure a positive end-result and to ensure they are proactively planning for a successful future.
Why Prophix for Manufacturers
Manufacturing companies have been using Prophix Performance Management solutions for over 20 plus years. Solving and eliminating challenges related to demand planning and forecasting; product costing; detailed product and customer analysis; resource availability; and reporting and consolidating manufacturing specific information. Prophix has provided a stable, consistent and invaluable solution to ensure plans are met and objectives are always obtained and improved upon.
Manufacturing organizations use Prophix Performance Management software and services for:
Detailed revenue planning & forecasting [+]
- Create detailed revenue plans including different revenue streams, such as product, service, and/or maintenance
- Utilize key manufacturing drivers and business measures in formulating and calculating revenue streams (i.e. average selling price, square footage, volume)
- Make changes, adjust, and forecast out revenue by simply changing centralized drivers and business model assumptions
- Generate scenarios for potential new product revenue and emerging markets
Precise product and production costing [+]
- Apply absorption costing, variable costing or the direct costing method to manufacturing associated costs
- Automate manufacturing overhead allocations using relevant allocation basis such as labor hours, machine hours and/or production units to ensure accurate cost of goods sold results
- Calculate overhead rates to correctly over or under apply manufacturing overhead to cost of goods sold with results having a direct effect on Net Income and Cash Flow
Driver based planning & reporting [+]
- Depending on the key industry metrics, generate driver-based reports to thoroughly analyze key business measures and metrics (i.e. dollars, units, volume, gallons, patients, trucks, etc.)
- Compare and analyze company results to prior year outcomes, reported industry averages, and competitors
- Develop sophisticated revenue, cost of goods sold, capital expenditure, operating expenses and/or personnel plans using key business drivers and formulas
Detailed product & customer profitability analysis [+]
- Analyze information from multiple viewpoints allowing stakeholders to view information based on divisions, product classes, account line-items, and/or customers
- Understand the true cost and true profit of your products by extracting sales order detail with the number of units and dollars specified by customer
- Identify product sales trends and customer buying patterns to better manage product mix
Understanding resource availability [+}
- Manage inventory levels such as raw materials, work in process and finished goods to ensure adequate inventory turnover is maintained
- Accurately plan for skilled workers, integrating overtime and shift premiums into calculations to reflect precise direct labor costs
- Prepare for periodic plant and equipment renewals by tracking existing capital expenditure investment
Timely month-end consolidation [+]
- Streamline the consolidation of data from multiple plants, divisions, and cost centers through automating consolidation business processes such as allocations, intercompany eliminations and report distribution
- Improve month-end and year-end closing processes, by collaborating with key stakeholders such as plant managers, VP of Operations and the VP of Finance
- Automate report distribution and incorporate supporting details and a detailed audit log
Generate manufacturing specific reports [+]
- Take advantage of OLAP technology to create and maintain manufacturing specific reports such as cost of goods sold, product, gross margin, volume, and unit variance reports
- Bring accountability to plant and division managers by utilizing responsibility reporting and bringing all relevant stakeholders into the process
- Satisfy multiple stakeholder requests by creating and using different report views and hierarchies
Manufacturing Resource Center
Manufacturing companies who have selected Prophix:
