Case study: Controlling Costs
“The ABC Costing solution presented by MyABCM stands out in terms of Cost/Benefit and the availability of its team during the implementation process, an item of fundamental importance to the success of a project. One aspect of great importance is its ease of use. A revealing statistic is how few times we needed to consult MyABCM’s technical support. When we did consult them, they were always available and efficient, guaranteeing continuity in the use of this tool, given that the company’s monthly closing process is critical and there’s little time to run it. Thus MyABCM’s Costing software has fully met our technical needs.”
Roberto Rosa Santana
Grupo Martins, Brazil
Martins Comércio e Serviços de Distribuição S/A is today the largest and best wholesale distributor in Latin America and is the main component of Grupo Martins. It distributes merchandise to 100% of Brazilian municipalities, playing a unique role in the national supply chain. It has more than 300,000 active clients.
Update the Costing system to reflect changes in management and evaluate the profitability of the different business areas.
Assign costs from the business support areas using less subjective criteria and be able to trace costs afterward to understand the assignments made.
Consolidate the calculations of revenues and direct and indirect costs and extract a combinational view of the profitability of the main business areas of the firm (Clients, Product Categories, Sales Channels, Product/Service Type and Geographic Region).
The size of the model is daunting due to the large number of dimensions involved (clients, region, product classification, etc) and the size of each of these dimensions (mainly clients and products).
The MyABCM solution was selected for the Costing of indirect costs and activities as well as direct costs for the business areas. This solution met our needs well in terms of determining costs and processing our defined model. After performing our Costing using the Model, we’re using our information portal in DW/BI to publish the results.
It’s an open system with an easy to use interface. The project’s first step was to model the process developed by Martins and Deloitte Touche Tohmatsu, in conjunction with MyABCM, mapping out the costs, activities and cost assignment drivers.
The implementation of the MyABCM solution took 3 months. Later we implemented the more complex step of extracting data from the transaction systems for the Martins DW, which was loaded into the MyABCM Cost Calculation process and then returned to the Martins DW/BI where we published different views of costs and profitability.
Now we’re able to align our businesses with the company’s Strategic Planning, deploying the results in the business areas and now managers are responsible for their specific areas. Costs assignments can be traced back to their origins giving the process transparency and providing understanding of the costs involved in each business area. The MyABCM methodology for controlling costs and production has made it possible to make forecasts for the company’s main businesses, making it possible for the manager to correct occasional deviations with greater agility.