Deceuninck
A new window on cost allocation
| CUSTOMER CASE |
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Industry
Manufacturing
Business Issue
More detailed insight in the group's complex cost allocation structure.
Solution
SAS®
Activity-Based Management
Benefits
Enhanced cost allocation and efficient reporting to monitor and
analyse costs. |
 download
.pdf |
Staying on top in a market where profit margins are continuously decreasing.
This is the challenge facing the Deceuninck Group. An important first
step in successfully retaining the top spot is a detailed insight into
the cost structure of each product and business group. Not an easy task
for a complex multinational. That is why they turned to SAS® Activity-Based
Management.
Detailed insight in a complex entity
The Deceuninck Group has experienced tremendous growth over the last
couple of years. Acquiring subsidiaries, opening production facilities,
and attracting suppliers all over the world has increased the group’s
complexity. This has been felt in every aspect of their business.
“This is especially the case when cost allocation is concerned,” says
Veerle Roobroeck, Activity Based Costing (ABC) Controller. “We have always
been a profitable company. But it wasn’t always easy to determine where
our profit was coming from. Such insight is absolutely crucial in a market
where margins are under increasing pressure. That is why we needed to find out
which costs are specific to producing a particular article. Are they necessary?
And how much do they represent in the cost structure?”
Increasing profitability in all aspects
SAS® Activity-Based Management answers these questions. “With
this tool we can assign costs rapidly to the correct activities with just
a few clicks of the mouse,” observes Roobroeck. “And we can do
this without having to go through a vast list of tens of thousands of
activities.”
“We can even simulate the costs of new products or production methods.
What’s more, it enables us to generate a complete and detailed cost overview
for each product line, sales subsidiary, and customer,” Roobroeck continues. “Such
information is highly valued by management. It creates the ideal basis to make
the right strategic decisions.”
| Deceuninck Group |
 |
The Deceuninck Group has positioned itself firmly
among the world’s top producers of fenestration and non-fenestration
profiles for the construction industry. The group is the market leader
in several European countries. It employs approximately 3,000 people in
31 production and/or sales subsidiaries throughout Europe, North-America,
and Asia. In 2005, the Group realized a turnover of 643.7 million Euro. |
Reports that speak for themselves
- Cutting the right costs
SAS® Activity-Based Management helps
identify the major cost centers in producing, marketing, and transporting
a particular product. The Deceuninck Group for instance discovered
it would profit from replacing foil as a packaging material for its
products. This has both cost and customer service implications. Research
revealed that customers would appreciate a packaging material that was
easier to remove.
- Improving business strategies
How do you accurately evaluate
the performance of business units? SAS® Activity-Based
Management makes this possible. Wages and other operational costs can
easily be assigned to each subsidiary, which can then be compared to
the income generated. With this information, better strategies can
be developed when and where necessary.
- Finding the right customer
Which customers generate the highest profit margins? SAS® Activity-Based
Management enables the assignment of precise production, transportation,
and product handling costs to customers. This information can cast a
whole new light on how to address and service customers. And maybe even
generate a new method of customer segmentation.
Why Deceuninck Group chose SAS® Activity-Based Management
- The tool enables staff to rapidly and easily assign costs to the right
activities
- The built-in reporting tool enables static and ad hoc reports and visualizes
them in a well-organized manner
- The system is easily integrated with external software such as accounting
programs, and allows easy export of data
- Management can make decisions based on accurate and objective information
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