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Use Case Description

  • Olam is worlds third largest trading company in Agro Commodity . It has operations spread across more than 40 Countries . While they are mainly into trading they also process and sell agro commodities like Rice ,Sugar , Cashew , Cocoa , Wheat , Spices .
  • Challenges were ( A) Agro Commodities deals with One input and multiple output . Costing multiple output becomes a challenge when the quantity of output is not known . Requirement was to allocate Input cost and Overheads on multiple products based on the realisable value of quantity produced. Challenge was that standard SAP doesn’t offer a solution for this kind of cost allocation ( B) Being into trading one of the main requirement was to budget and track vessel wise.

Solution Brief

  • Scope was to setup an SAP System design for Costing so that the inventory valuation is done by allocating actual input on multiple products based on its actual quantity produced and realisable value . The solution was delivered as a part of Global template solution which was to be rolled out to all the countries.
  • Standard Costing + Material ledger was implemented along with custom development for calculating cost apportionment ratio dynamically .
  • Split valuation concept with material ledger was implemented to derive vessel wise profitability . A Grounds up product was developed in ABAP for doing Vessel wise cost provisioning and COPA was used for Profitability reporting .

Outcomes

  • Customer was now able to calculate actual cost using SAP system .
  • This solution has been rolled out in 38 countries so far and is successfully delivering desired results .(B) Vessel wise profitability and its budgeting is now possible .