Standard Cost implementation
Implementation of Standard Cost to secure the right operational behaviour and transparency in reporting.
The client had identified two key issues with the existing cost principles:
It was decided to implement Standard Cost instead of FIFO on all items, and Implement Consulting Group was asked to assist in the preliminary analysis and planning of the subsequent implementation.
In close collaboration with the client, all the company’s processes – from procurement of raw materials to delivery of finished goods – were reviewed, and the principles for the calculation of Standard Cost across product groups were identified.
The entire management team participated in an extensive collaborative process which included ongoing analysis and quick decisions. This approach yielded an efficient project which established a range of new initiatives and updated the existing processes.
The work of the project team resulted in the development of the following initiatives:
In addition to the above initiatives, the project team also aligned the following process steps to the new costing system:
After the intensive collaborative process, the client had established the basis for standardised and transparent costing principles across all product categories.
The project ensured:
A comprehensive and detailed plan for full implementation of all sub-deliverables towards the new financial year was completed, including resource allocation, time perspectives as well as important milestones.
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