Ce diaporama a bien été signalé.
Nous utilisons votre profil LinkedIn et vos données d’activité pour vous proposer des publicités personnalisées et pertinentes. Vous pouvez changer vos préférences de publicités à tout moment.
Supply Chain and beyond
Variance Analysis Framework
“Superior business results through superior analysis”
Supply chain variance analysis - Background
 Need for systematic planning and control of supply chain
costs
 At the time...
Supply Chain Variance Analysis – customer example
Mill Prod Group Warehouse Mode Carrier Avg Load
CUSTOMER A 80% ABC Truck...
Supply Chain Variance Analysis Framework
Sales Forecasts
Planned
Shipments
Budgeted
Rates
Planned Transportation Cost or A...
Variance Analysis Data Hierarchy
5
Variances
Top/Bottom
Data
Summarized by
Relevant Drivers
Individual Shipments
recorded ...
Hierarchy of Mixes
6
Product
Line
Customer
Mill
Warehouse
Truck
ABC
Trucking
DEF
Trucking
Bob’s
Rail
BNSF
Warehouse
Truck
...
7
Material Mchne Prod Line CarNum Carrier Shpmnt Delivery STNo Period Ship-to EType Mode Mill Plnt OrdNum OrdItem Zip Code...
Variable Margin - Itemized
Sales
Freight
Chemicals
Raw
Materials
Purchased
Power
Variable
Margin 8
Sales Variances –Mixes, Prices and Volumes
Sales
Freight
Chemicals
Raw
Materials
Purchased
Power
Variable
Margin
Customer
...
Freight Variances – Mixes, Prices and Volumes
Sales
Freight
Chemicals
Raw
Materials
Purchased
Power
Variable
Margin
Destin...
Organizational Level
Supply Chain Variance Analysis - Reporting
Variable Margin, Act vs Plan – November 2014
130.15
126.33...
Organizational Level
Supply Chain Variance Analysis - Reporting
Variable Margin, Act vs Plan – November 2014
130.15
126.33...
Freight Cost Variances
Supply Chain Variance Analysis - Reporting
Freight Cost, Actual vs Plan – November 2014
90.70
93.14...
Freight Cost Variances
Supply Chain Variance Analysis - Reporting
2.44
Freight Cost, Actual vs Plan – November 2014
90.70
...
Exchange
Fuel
Customer
Mix
Product
Mix
Routing
Adjustments
Freight
Rate
First Leg
Rate
Storage
Mode
Carrier
Yield
Other
Co...
Freight Cost Variances
Supply Chain Variance Analysis - Reporting
Freight Cost, Actual vs Plan – November 2014
90.70
93.14...
Unfavorable Mode Mix – Individual Contributors (Top 20)
Supply Chain Variance Analysis - Reporting
Prod Line
Cust
Name Cit...
Freight Mode Mix - Transactions that caused variances
Supply Chain Variance Analysis - Reporting
Delivery Period Ship-to M...
Freight Mode Mix - Transactions that caused variances
Supply Chain Variance Analysis - Reporting
Delivery Period Ship-to M...
Types of actionable reporting:
 Freight Cost Variance summary, organization
 Freight Cost Variance summaries by product ...
Supply Chain Variance Analysis - Benefits
 Expresses the financial effects of marketing and cost strategic decisions
rega...
Supply Chain Variance Analysis publications and use
 Solving the Supply Chain Cost Riddle
 PaperAge, Sep – Oct 2007
 CM...
Supply Chain Variance Analysis - Contact
 Email: valeri.gladkikh@telus.net
23
Prochain SlideShare
Chargement dans…5
×

Actionable Variance Analysis Framework For Better Cost Control

2 396 vues

Publié le

In-depth detailed variance analysis of actual vs budget or actual vs prior period is the way to uncover problems and opportunities. Detailed reporting on what needs to be fixed and how.

Publié dans : Données & analyses
  • This is also a great tool for the value chain analysis and would help leveraging pricing activity
       Répondre 
    Voulez-vous vraiment ?  Oui  Non
    Votre message apparaîtra ici

Actionable Variance Analysis Framework For Better Cost Control

  1. 1. Supply Chain and beyond Variance Analysis Framework “Superior business results through superior analysis”
  2. 2. Supply chain variance analysis - Background  Need for systematic planning and control of supply chain costs  At the time:  Around $200 million supply chain budget  2.2 million tonnes of product  4 product lines  1,000 customers  30 warehouses  5 modes of transportation  Numerous carriers – ocean, 33; rail, 3; truck, 93; barge, 2  Provide precise measurement for individual cost drivers 2
  3. 3. Supply Chain Variance Analysis – customer example Mill Prod Group Warehouse Mode Carrier Avg Load CUSTOMER A 80% ABC Truck 20.5 70% Truck PLAN 20% DEF Truck 19.6 60% North Plant North Medium 30% Rail 100% Big Rail 69.9 Plant 40% Big Whse 100% Truck 100% Kerry Truck 18 Mill Prod Group Warehouse Mode Carrier Avg Load ACTUAL 50% KLM Truck 17.1 90% Truck 50% DEF Truck 22.5 North Medium 100% North PlantPlant 10% Rail 100% Large Rail 70.7 3
  4. 4. Supply Chain Variance Analysis Framework Sales Forecasts Planned Shipments Budgeted Rates Planned Transportation Cost or Actual Cost Prior Period or Optimal Costs Actual Shipments Actual Cost Actual Transportation Cost Actual Shipments Shipping Patterns 4
  5. 5. Variance Analysis Data Hierarchy 5 Variances Top/Bottom Data Summarized by Relevant Drivers Individual Shipments recorded by ERP
  6. 6. Hierarchy of Mixes 6 Product Line Customer Mill Warehouse Truck ABC Trucking DEF Trucking Bob’s Rail BNSF Warehouse Truck Local John’s Rail UP Rail Mill Warehouse Rail CN Rail Warehouse Truck XYZ Truck Quick Truck Intermodal CN Inter
  7. 7. 7 Material Mchne Prod Line CarNum Carrier Shpmnt Delivery STNo Period Ship-to EType Mode Mill Plnt OrdNum OrdItem Zip Code Vendor Type 338770 04 DIRECTORY 683298 81101161 0000 04.2013 65538 06 03 1001 0007 229600 000002 18202 338770 04 DIRECTORY 100754 BIG RAILWAY COMPANY 683298 81101161 0001 04.2013 65538 06 03 1001 0007 229600 000002 18202 Rail 513310 04 DIRECTORY 683298 81101162 0000 04.2013 65538 06 03 1001 0007 229627 000001 18202 513310 04 DIRECTORY 683298 81101162 0000 04.2013 65538 06 03 1001 0007 229627 000004 18202 513310 04 DIRECTORY 100754 BIG RAILWAY COMPANY 683298 81101162 0001 04.2013 65538 06 03 1001 0007 229627 000001 18202 Rail 513310 04 DIRECTORY 100754 BIG RAILWAY COMPANY 683298 81101162 0001 04.2013 65538 06 03 1001 0007 229627 000004 18202 Rail 338770 04 DIRECTORY 123268 CUST BRKR INC 683298 81101161 0002 04.2013 65538 06 03 1001 0007 229600 000002 18202 Custom & Harbour Maintenance 513310 04 DIRECTORY 123268 CUST BRKR INC 683298 81101162 0002 04.2013 65538 06 03 1001 0007 229627 000001 18202 Custom & Harbour Maintenance 513310 04 DIRECTORY 123268 CUST BRKR INC 683298 81101162 0002 04.2013 65538 06 03 1001 0007 229627 000004 18202 Custom & Harbour Maintenance Product LineSHIPTO SHIPTO NAME Plant Desc Mode Carrier Num Carrer Name Tons Loads COATED 235 Customer A BIG DSTRB CENTRETRUCK 100754228 ABC TRUCK 250 12 UNOCATED 235 Customer A BIG DSTRB CENTRERAIL 999995 BIG RAIL CO 480 5 Product LineSHIPTO SHIPTO NAME Plant Desc Mode Carrier Num Carrer Name Tons Loads COATED 235 Customer A BIG DSTRB CENTRE TRUCK 56894563 DEF TRUCK 41.5 2 UNOCATED 235 Customer A MID WEST CENTRE RAIL 999998 BIG RAIL CO 240 6 ACTUAL BENCHMARK Data Example
  8. 8. Variable Margin - Itemized Sales Freight Chemicals Raw Materials Purchased Power Variable Margin 8
  9. 9. Sales Variances –Mixes, Prices and Volumes Sales Freight Chemicals Raw Materials Purchased Power Variable Margin Customer Mix Variance Product Brand Mix Variance Product Line Mix Variance Grade Mix Variance Sales Manager Variance Price Variance Rebates Variance Discounts Variance Volume Variance Sales Territory Variance
  10. 10. Freight Variances – Mixes, Prices and Volumes Sales Freight Chemicals Raw Materials Purchased Power Variable Margin Destination Mix Variance Product Mix Variance Routing Variance Mode Mix Variance Carrier Mix Variance Freight Rate Variance Fuel Surcharge Variance Other Shipping Expenses Variance Yield Variance Volume Variance 10
  11. 11. Organizational Level Supply Chain Variance Analysis - Reporting Variable Margin, Act vs Plan – November 2014 130.15 126.33 3.15 2.44 1.78 2.08 0.96 1.13 120 125 130 Planned Variable Margin Sales Freight Fiber Chemicals Materials Power Actual Variable Margin $/MT 11
  12. 12. Organizational Level Supply Chain Variance Analysis - Reporting Variable Margin, Act vs Plan – November 2014 130.15 126.33 3.15 2.44 1.78 2.08 0.96 1.13 120 125 130 Planned Variable Margin Sales Freight Fiber Chemicals Materials Power Actual Variable Margin $/MT 12
  13. 13. Freight Cost Variances Supply Chain Variance Analysis - Reporting Freight Cost, Actual vs Plan – November 2014 90.70 93.14 2.1 1.0 2.9 1.1 0.8 1.9 85 90 95 100 Plan Cost/Unit Destina- tion Routing Mode Carrier Rates Yields Actual Cost/Unit $/MT 13
  14. 14. Freight Cost Variances Supply Chain Variance Analysis - Reporting 2.44 Freight Cost, Actual vs Plan – November 2014 90.70 93.14 2.1 1.0 2.9 1.1 0.8 1.9 85 90 95 100 Plan Cost/Unit Destina- tion Routing Mode Carrier Rates Yields Actual Cost/Unit $/MT 2.44 14
  15. 15. Exchange Fuel Customer Mix Product Mix Routing Adjustments Freight Rate First Leg Rate Storage Mode Carrier Yield Other Costs 15 Actual Example of Freight Analysis, November 2014 – Actual vs. Plan Supply Chain Variance Analysis - Reporting
  16. 16. Freight Cost Variances Supply Chain Variance Analysis - Reporting Freight Cost, Actual vs Plan – November 2014 90.70 93.14 2.1 1.0 2.9 1.1 0.8 1.9 85 90 95 100 Plan Cost/Unit Destina- tion Routing Mode Carrier Rates Yields Actual Cost/Unit $/MT 16
  17. 17. Unfavorable Mode Mix – Individual Contributors (Top 20) Supply Chain Variance Analysis - Reporting Prod Line Cust Name City Ctry Act MT Plan MT Mode Var$ Whse Mode Plan Tonnes% Act Tonnes% UNCOATED Cust A New York US 2,000 1,000 36,772 North Rail 95% 50% DIRECTORY Cust B Atlanta US 2,000 2,500 20,268 South Rail 100% 83% UNCOATED Cust C Miami US 2,000 2,000 17,970 South Rail 70% 25% UNCOATED Cust D Birmingham US 1,500 1,500 13,061 South Rail 83% 49% UNCOATED Cust E Toronto Canada 500 1,000 9,018 North Truck 14% 75% UNCOATED Cust F Winnipeg Canada 1,000 1,000 7,678 West Rail 76% 33% DIRECTORY Cust G Montreal Canada 5,000 2,500 6,529 North Rail 97% 95% DIRECTORY Cust H Chicago US 1,000 500 6,325 North Rail 95% 79% UNCOATED Cust I Chicago US 500 100 4,613 North Rail 100% 56% UNCOATED Cust J Ottawa Canada 1,500 1,000 3,868 North Rail 80% 73% NEWSPRINT Cust K Jacksonville US 1,150 800 3,115 South Truck 50% 78% NEWSPRINT Cust L Memphis US 558 450 2,875 South Rail 80% 67% DIRECTORY Cust M Edmonton Canada 1,011 800 2,850 West Rail 85% 71% COATED Cust N Calgary Canada 333 750 2,620 West Rail 90% 83% COATED Cust O Los Angeles US 630 1,200 2,102 West Rail 84% 77% DIRECTORY Cust P Chicago US 456 1,100 1,900 North Rail 76% 68% NEWSPRINT Cust R Phoenix US 489 600 1,852 West Rail 90% 78% NEWSPRINT Cust S Pittsburg US 122 800 1,753 North Rail 90% 79% COATED Cust T Gary US 756 550 1,560 North Rail 90% 81% DIRECTORY Cust U New York US 265 350 1,320 North Rail 90% 84% 17
  18. 18. Freight Mode Mix - Transactions that caused variances Supply Chain Variance Analysis - Reporting Delivery Period Ship-to Mode Ship Point City Name Ship To Weight Accrued 3660211 11.2014 86028 RAIL Whse-South New York Customer A 80 4,450 3660212 11.2014 86028 RAIL Whse-South New York Customer A 76 4,270 3660213 11.2014 86028 RAIL Whse-South New York Customer A 73 4,459 3660214 11.2014 86028 TRUCK Whse-South New York Customer A 17 1,600 3660215 11.2014 86028 TRUCK Whse-South New York Customer A 19 1,850 3660216 11.2014 86028 TRUCK Whse-South New York Customer A 18 1,700 3660217 11.2014 86028 RAIL Whse-South New York Customer A 81 4,500 3660218 11.2014 86028 RAIL Whse-South New York Customer A 80 4,518 3660219 11.2014 86028 RAIL Whse-South New York Customer A 74 4,409 3660220 11.2014 86028 RAIL Whse-South New York Customer A 77 4,376 3660231 11.2014 68340 RAIL Whse-North Atlanta Customer B 90 3,550 3660232 11.2014 68340 RAIL Whse-North Atlanta Customer B 88 3,270 3660233 11.2014 68340 RAIL Whse-North Atlanta Customer B 78 3,390 3660234 11.2014 68340 TRUCK Whse-North Atlanta Customer B 15 1,469 3660235 11.2014 68340 TRUCK Whse-North Atlanta Customer B 19 1,315 3660236 11.2014 68340 TRUCK Whse-North Atlanta Customer B 20 1,490 3660237 11.2014 68340 TRUCK Whse-North Atlanta Customer B 17 1,320 3660238 11.2014 68340 TRUCK Whse-North Atlanta Customer B 18 1,503 3660239 11.2014 68340 TRUCK Whse-North Atlanta Customer B 17 1,395 18
  19. 19. Freight Mode Mix - Transactions that caused variances Supply Chain Variance Analysis - Reporting Delivery Period Ship-to Mode Ship Point City Name Ship To Weight Accrued 3660211 11.2014 86028 RAIL Whse-South New York Customer A 80 4,450 3660212 11.2014 86028 RAIL Whse-South New York Customer A 76 4,270 3660213 11.2014 86028 RAIL Whse-South New York Customer A 73 4,459 3660214 11.2014 86028 TRUCK Whse-South New York Customer A 17 1,600 3660215 11.2014 86028 TRUCK Whse-South New York Customer A 19 1,850 3660216 11.2014 86028 TRUCK Whse-South New York Customer A 18 1,700 3660217 11.2014 86028 RAIL Whse-South New York Customer A 81 4,500 3660218 11.2014 86028 RAIL Whse-South New York Customer A 80 4,518 3660219 11.2014 86028 RAIL Whse-South New York Customer A 74 4,409 3660220 11.2014 86028 RAIL Whse-South New York Customer A 77 4,376 3660231 11.2014 68340 RAIL Whse-North Atlanta Customer B 90 3,550 3660232 11.2014 68340 RAIL Whse-North Atlanta Customer B 88 3,270 3660233 11.2014 68340 RAIL Whse-North Atlanta Customer B 78 3,390 3660234 11.2014 68340 TRUCK Whse-North Atlanta Customer B 15 1,469 3660235 11.2014 68340 TRUCK Whse-North Atlanta Customer B 19 1,315 3660236 11.2014 68340 TRUCK Whse-North Atlanta Customer B 20 1,490 3660237 11.2014 68340 TRUCK Whse-North Atlanta Customer B 17 1,320 3660238 11.2014 68340 TRUCK Whse-North Atlanta Customer B 18 1,503 3660239 11.2014 68340 TRUCK Whse-North Atlanta Customer B 17 1,395 19
  20. 20. Types of actionable reporting:  Freight Cost Variance summary, organization  Freight Cost Variance summaries by product line  Variance summaries by customer  Top-20 Unfavourable customer, top-20 favourable customer variances for each type of variance  Freight rate variances by customer and product  Fuel surcharge variances by mode and carrier  Destination Mix, by grade and customer  Carrier Mix by mode and customer  Average Shipment Size Variance by destination and carrier  Ad hoc Supply Chain Variance Analysis - Reporting 20
  21. 21. Supply Chain Variance Analysis - Benefits  Expresses the financial effects of marketing and cost strategic decisions regarding choice of customers, products, suppliers, etc  Explains costs behavior and interrelationships  Reinforces the value of an accurate and realistic budget via assigning accountability and comparing performance against actual results on a granular level  Produces actionable reporting of customers, products, suppliers, operational decisions that are the largest contributors to the cost variances  Pinpoints areas of opportunities for cost improvements 21
  22. 22. Supply Chain Variance Analysis publications and use  Solving the Supply Chain Cost Riddle  PaperAge, Sep – Oct 2007  CMA Management, Jan 2008  Management Accountant (India), Pulp and Paper Canada, Supply Chain Europe, Materials Management and Distribution, etc..  A case study of a variance analysis framework for managing distribution costs, Accounting Perspectives, Volume 6, issue 2, 2007  Used in the Managerial Accounting textbook, 8th Cdn edition, by Garrison, Chesley, Carroll, Webb; McGraw Hill Higher Education  Teaching material for management accounting classes at York U, University of Manitoba  An “Articles of Merit” selection by the International Federation of Accountants for 2008 22
  23. 23. Supply Chain Variance Analysis - Contact  Email: valeri.gladkikh@telus.net 23

×