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Use Case Description

  • 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.

Solution Brief

  • 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.

Outcomes

  • 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 .