Forecast Cost to Manufacture
A leading Australian manufacturer needed an approach for understanding and forecasting long term production costs and also required a tool for business decision making and communication between the operations and finance teams.
Parity reviewed the existing production and costing processes with the operations and finance teams, taking into account the multi-year seasonal variations in the production process.
Two financial models were produced. First was a Proof of Concept model, which was used by the finance and operations teams for planning, budgeting and forecasting for 12 months. This was followed by the development of a more detailed model, which rolled out to a broader number of users.
The Cost to Manufacture model has been adopted by the company as a critical component for their planning, forecasting and budgeting processes.