Management systems and cost reduction in the industry

Have you ever wondered how to reduce your company's operating and process costs?

Management systems are a huge help in reducing production process costs by combining efficiency, standardization, traceability, sequencing, and data accuracy to support better decision-making, industrial management adjustments, and strategic planning.  

In this 3-module series, we will address relevant topics in INDUSTRIAL COSTS every two weeks, leveraging the knowledge and experience gained over 34 years of developing and implementing computerized systems for production and related sectors across various textile, chemical, and derivative industries.

Let's get started.

Industrial management systems in practice

With the support of an automated system, it is possible to monitor all industrial costs and expenses in an integrated, uniform, and sequenced manner—from the entry of sales orders through product and process engineering, analyzing raw material, production, and packaging costs, and verifying results by product, sales order, customer, or representative. Furthermore, you can calculate the income statement by business unit, already accounting for tax incentives. All of this within a single tool that connects information from various areas of the company.  

A company's structure, behavior, attitudes, and operating methods are all reflected in its costs. The more structured and reliable information a company has, the better its cost management will be. Greater efficiency in this regard means increased net profit margins, business profitability, and market competitiveness.

Costing

The process of identifying, analyzing, and controlling a company's production costs and expenses is called costing. By the way, defining strategic objectives when calculating costs is crucial for structuring a costing system. The objectives are usually simple; the complexity lies in data processing. The common goal is to manage costs for managerial and accounting purposes, but it is possible to go much further and focus on profitability.

‍In a SPECIALIZED computerized system, you can:

• Identify product and process costs;
• Set sales prices based on desired profitability targets;
• Analyze the profitability and contribution margin of products sold, generating visual alerts for low-performing items at the time of order entry;  
• Analyze the company's break-even point;
• Perform cost simulations.

In practice, cost management starting from process engineering provides production process times for each product, and in product engineering, the system provides data on the raw materials of products sold, with a replacement price list that is updated automatically.  

The projected monthly expenses for production costs and overhead, along with the technical specifications, are provided by the system, breaking down the cost per minute for each production cost center.  

Automation provides a costing structure with hourly consumption rates and a dynamic cost distribution matrix, which allows for the allocation of general manufacturing expenses.

Operacional

Operacional's systems feature a comprehensive technical specification and costing structure that, in addition to providing real-time process data and raw material consumption, allows for the analysis and comparison of costs and sales prices. The indirect production cost allocation matrix is configurable and dynamic, ensuring more precise expense distribution. Furthermore, the Income Statement (DRE), which highlights net results over a specific period, can be generated with just a few clicks. All of this in a single tool.  

Consulting during the implementation of industrial management systems is designed to guide users in getting the most out of the solution. With technical expertise and an innovative mindset open to more efficient ideas, our consultants constantly update the system to adapt to business growth while ensuring compliance with accounting standards and current legislation.

Managers will easily be able to identify:

• The most profitable products the company manufactures;
• The most profitable clients and representatives that meet company expectations;
• The company's strengths and weaknesses regarding costs and expenses;
• Business results.

Maintaining company competitiveness

We live in globalized and highly competitive markets, where competition has become even more intense in these new times. When it comes to modernization and adapting to change, companies must inevitably seek the tools that will lead them to Industry 4.0, and the core principle is to manage existing resources and infrastructure with maximum efficiency.  

To maintain profitability, managers must stay tuned to REAL COSTS to achieve maximum control over their spending and maximize gains.  

It is also worth noting that our systems are fully prepared to meet all Bloco K requirements.  

See you soon!