Industrial costing across two companies, in two countries
A flavour and fragrance manufacturer implemented industrial costing and floor inventory — including loading ancillary import costs onto product cost — and went fully live in two companies.
- Priority ERP
- Industrial costing
- Multi-company
- Inventory
- Sector
- Flavour and fragrance manufacturing
- Status
- Running in production in two companies — in Israel and in the United States.
The challenge
A manufacturer importing raw materials faces a question that sounds simple and is not: what does the product actually cost. The purchase price is only part of it. Freight, insurance, customs and purchase tax are real costs that arrive on separate invoices, sometimes from different vendors, and sometimes months after the goods.
Why a standard implementation was not enough
For as long as ancillary costs are not connected to the products they belong to, product cost is wrong — and with it margin and every profitability decision. A finance director who does not trust product cost will build a parallel spreadsheet, and the moment that happens the system has become a system of record only.
Architectural approach
An import file links ancillary costs to specific purchase invoices, and when the costing run executes it loads them onto the cost of the purchased products. The allocation method is set per cost item — by weight, volume or price — because sea freight divides differently from insurance. A standard import cost is defined as a percentage by shipping mode, so there is a reasonable cost figure even before the actual invoices arrive.
What was delivered
- Full industrial costing with import files
- Ancillary cost allocation by weight, volume or price
- Standard import cost by shipping mode
- Customs and purchase tax configured at country and item level
- Floor inventory management
- An operating manual written for the customer