Wheels India limited caters to 80 % of the requirement of automobile wheels in Indian market . They Operate on a very thin margin and the only way to improve upon the profitability was to have complete visibility of the cost and profitability.
Wheels India management had initiated a drive for decreasing the cost across the organization.
Management also wanted a system for budgetary control.
Scope was to Setup Actual costing system and Management reporting system . Some of the Key challenge here was to allocate certain overheads on products based on the Circumference of the Wheels , Move away from traditional way of allocating overheads based on Machine time to more appropriate and accurate cost driver.
SAP BCS – Budgetary control system was introduced to control revenue and capex budget.
Apart for getting actual valuation for inventory produced , Since different overhead allocation was done based on cost drivers a better visibility of cost was established .