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Production profitability
With the ability to monitor the profitability of each product, and with the knowledge on the structure of the total cost of production, the Management may introduce strategies aimed at reducing the production cost, may halt the production of selected, unprofitable products or, if reasonably justified, consciously decide to continue the production of such products. These capabilities are provided by Xpertis Produkcja.
With Xpertis Logistyka and Xpertis Produkcja, Sales Department employees are able to establish the order completion dates at the time orders are accepted – it requires a feasibility check. Production Manager decides if a new, priority order is accepted after production capacity and cost of engaging the required resources is assessed. As a result, the cost of order execution is established accurately on the basis of customer’s time requirements and company’s production plans. Thanks to information on product availability, sales are more effective and quotes are prepared faster.
Raw material purchase involves the need to continuously monitor prices offered by various suppliers. Production Manger estimates the impact of the change in key material or labor cost by creating simulations on the basis of production cost calculations as well as technological, inventory and payroll data. It enables an ongoing control of production costs in relation to the sale prices, and an ongoing profitability check.
When planning purchases, Logistics Manager uses information from various sources, e.g., current inventory levels, sales orders, technological documentation, plans and current production as well as supply orders that were already submitted. With this data, Xpertis safeguards company's business against any downtimes caused by material shortages. On the other hand, warehousing costs and means indented for material purchase may be reduced after safe inventory levels are defined.
At the end of each month, Production Manager informs the employees of the achieved efficiency calculated by comparing the number of worked hours with company standards. Such information, based on the data accumulated in Xpertis, allows for an effective work planning. It also enables the Management to calculate performance indicators which may be used for staff management. At the same time, Chief Process Engineer is able to continuously update standard time rates on the basis of the actual production performance. Raw material consumption
The quantities of materials issued by the Warehouse Manager are either based on actual demand or approved by an authorized person. This way, unjustified issues are avoided, and the employees are aware that each additional quantity must be reported. Moreover, when closing orders, Production Manager may demand explanations on unusual material consumption indicated by comparing consumed quantities with company standards.
Xpertis Produkcja also supports the work of QA Departement. Product and raw material quality control performed at all stages of the manufacturing process ensures that the customers receive products that comply with the strict quality standards. Quality assessment may include all stages – from the receipt of materials sent-in by suppliers or manufactured in-house to warehousing. It ensures compliance with industry standards as well as customer satisfaction. If faulty products are to be withdrawn from the market, tracing the affected recipients is as easy as defect tracking. As a result, costs of returns and claim processing are reduced, while profitability is increased.
Xpertis Gospodarka remontowa supports Technical Departments in maintenance and spare part supply planning as well as in repair and maintenance work ordering and reporting. Information on machine availability and capacity in various periods may be included in the production plan by the Production Manger. This way, repair and maintenance works do not interfere with production. Gospodarka remontowa also includes updates on the wear of parts and components as well as remainders of warranty inspections, insurance policies or renovations.
One of Production Manager’s many duties is to draw a production budget. Such budget should be broken down by individual products and assortment groups, and should include personnel and material costs. Because of a large number of products, variable technological data (including material consumption and time rate standards), and ever-changing raw material prices and man-hour rates, budget planning is usually troublesome and time-consuming. When introducing a new product, after an important technological change or after a significant increase of the key raw material prices, Production Manager must prepare a new budget version and compare it with the previous one to assess the impact of the changes. To facilitate these actions, to minimize the risk of errors and to enable sound decisions, one should use budgeting software such as Xpertis Controlling. |
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