Production cost planning using Qlik Sense Enterprise and K4 Analytics
Until now, the process of costs analysis and planning rates and surcharges was done manually, which was extremely time-consuming and required a lot of work by representatives of the Controlling department. Costs analysis was carried out in Excel files, in which the client manually supplemented last month’s data, correcting some values based on the experience and knowledge, assigning them to the appropriate resource groups. Once the sheets were completed, labor and machine rates were determined using formulas, which also required manual data entry and correction, such as employee availability.
Due to the necessity of entering values manually, the process was exposed to a significant risk of error, and the data was not available immediately after the month was closed. In order to obtain a summary of monthly costs, it was necessary to enter the essential information into multiple separate files and manually determine the missing data. Historical costs related to human resources and machine usage were not stored (i.e., versioned). This data was scattered in Excel files (so-called flat files) on the user’s disk, and therefore, it was not publicly available, which could have a significant impact on the overall operation of the company.
The process of determining rates and other cost elements was based on the experience of the Controlling department representative, which made it impossible to reproduce the report in IT solutions, using only parameters downloaded from the system. The implementation required the participation of an experienced controller and therefore the success of the existing process depended on the availability of a specific employee.
In summary, the existing process has been burdening with the following problems:
- Time-consuming – activities performed manually, requiring a considerable amount of work by a qualified controller;
- Lack of access to current data – inability to analyze production costs in real time;
- Lack of historical data – no versioning costs related to the work of production employees and the operation of machines;
- Lack of data consistency – manual correction of data caused final reports differed from the data available in the ERP system.
Implemented tools allowed to significantly accelerate the process of generating reports and determining planned values by creating the following Business Intelligence applications:
- Analytical application for tracking production costs;
- Planning application for verification, determining and planning of fixed and variable rates;
- Planning application for verification, determining and planning of percentage markups for material.
The implementation of the BI tool – Qlik Sense – allowed for addressing detected customer’s problems and implement effective system for analyzing and forecasting production costs.
The automation of processes allowed for significant reduction of time in work execution and data consistency, by eliminating intermediate reports, created in Excel files so far. Currently, data is downloaded directly from the ERP system and modified using the K4 Analytics tool. In addition, by implementing a personalized system for versioning rates and markups, the problem of lack of access to historical data has been solved, allowing monitoring and comparing data for selected periods.
Automation of the process allowed to reduce time-consuming activities by 25%
Significantly streamlined the work of the Controlling department, by reducing the amount of work required to generate a set of analytical reports
Reducing risks arising from potential human error and unavailability of a qualified employee
Ensure data consistency by directly connecting the source (ERP system) with the BI tool - Qlik Sense
Ability to track over time and version dynamic changes in costs
Creation of automatically refreshed analytical reports for verification of costs in all available dimensions, e.g. in relation to departments involved in a given process, a specific production order or product group
Increasing the accuracy of production cost determination, resulting in more accurate planning of the company's operations
Introducing precise data access management by assigning permissions at the level of roles and user types
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Qlik and K4 systems, by automating data entry and verification processes, significantly affect the development and operation of the organization where they are implemented. Implementing the tools even in one department can have a fundamental impact on the workflow of the entire enterprise. The example of a large, international production company shows how to streamline the flow of current cost information throughout the organization in a relatively easy and affordable way.
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