Case Study of Sanofi – OPEX

Operational Expenses are some of the complex and dynamic processes of the organization. Because unlike CAPEX, operational expenses capture the day to day operational expenses of various assets, services etc. to keep the business running which is dynamic in nature, the complexity increases especially in the manufacturing industry where there are multiple cost centers of different nature, headed by various department heads who download their respective data from various sources and do their math on spreadsheets and attach the same over email to collaborate which is a complex process and requires dedicated team to collaborate and sort these complex spreadsheet data.

Present Scenario

Usually, in a typical OPEX data capturing there are multiple intricacies with various individuals with roles, responsibilities, approvals, rejections, version changes, departments are involved. Multiple Operating expenses under various cost centers, with the maintenance of master data, with complex calculations becomes a tough job. When all these processes are maintained over excel it becomes even tougher.

Especially when the company size is big with various third-party IT applications and has a global ERP implementation etc., still, at an organizational level, finance users were still dependent on manual spreadsheets for the OPEX. When Master data sits elsewhere, planning inputs come from different sources, actuals and historical data come from ERP. It creates a lot of challenges for the MIS team and finance heads eating into some core performance issues in the finance departments.

Critical Challenges and Solutions

Master Data is a critical part of any department which acts as a base for further data capturing at various stages. we gave separate master admin module where parameters like cost center master, product master, budget head, GL code master, material master, rate master, power and FO oil master data is maintained and are populated at required pages.

Budget head page captures parameters like Power & Fuel, Repairs Plant and Machinery costs, salaries etc monthly with historical data.

Power & Furnace Oil: are some of the closely guarded parameters in the manufacturing, as they are regulated with local laws, environment protections standards so the budgeting and actuals of the same are closely monitored in the organizations based on the Load Factors, number of the days in operation, number of days of shutdown and the consumption rates are calculated for final Power in KWH

Bill Of Materials: in OPEX the bill of all the raw materials, components, sub-components, parts and quantities of all the raw materials and the other ingredients which need to be added to produce the end product comes under BOM, else they fall under the NON-BOM category.
These are given the separate page for the data collection under which each page for variable and non-variable BOM capturing are also captured in a single interface for the bulk data for all months, keeping the same spreadsheet experience intact.

Reports:
Features of Amplelogic’s Operational Expenses (OPEX) Automation:

  • The head initiates the budgets for various departments designated as cost centers ranging from Global OPEX GL code, Power & Fuel, Travel, HeadCount, Projects, HR Salary Cost center wise Summary, and Administrative Expenses are some of the factors captured under various cost centers.
  • It reaches the various heads for their estimates and actual capturing, headed by the representative
  • Production Plan
  • ing captures the data of all the month wise planning sheet and sends for the next comments and approvals with auto trigger emails.
  • The business users need not learn new software but stick to the same excel view with a complete automation experience.
  • The data will be auto-populated based on the master data mapping in the master login, the master data fields include Budget head, Product Master, GL code master, Material Master, cost center master reflecting in various budget heads.
  • The cost center owner can add a new project based on the new requirement and it will be added under the same GL code.
  • The head can revisit the budget even after completion of the cycle and update the same for any changes.
  • Error-free data is possible as the validations are put in place for condition checking and comment capturing for any deviations.
  • Custom requirements like Power and Fuel, Man Power based on the hour calculation is possible based on the number of hours of operation and plant shutdown with complete data auto calculated giving the total power consumption.
  • HeadCount and salary calculation month wise.

Benefits:

  • Ownership with Controlled role-based access to Columns, Cells, and Rows.
  • Status Trackers batch wise, SKU code wise, Pending Status trackers, P&L reports, Region wise, Cost center wise etc can be generated.
  • Accurate MIS reports can be generated.
  • Supports large numbers of users base with pre-defined rules & historical data inputs
  • Avoids Multiple communications (top-down & bottom-up iterations)
  • No Manual check on the current status of Excel as everything is visible on the dashboard on the pending status.
  • Data reconciliation is possible with differences at each stage of collation being eliminated.
  • Addresses the Real life challenges coordinating various cost centers heads and complex data capturing issue with various user-defined excel templates.
  • Tracks the inputs on pre-populated master data at each stage & deviations from the rules at each stage of action.
  • Abnormal Deviations across value, growth percentage, value generation, and target acceptance have to be quantified with a comment which maintains a transparency throughout the process.
  • The preceding head has the complete picture of the Budgets V/S Actuals as he/she can navigate directly to the view of the lowest level of the department and have a complete overview
  • The democratization of data is possible as the same data can be viewed with access permissions granted in the admin module by various users and departments while keeping the sanctity of the same as users can view the data but can’t edit the same.
  • Reports integrating inputs from various cost centers, BOM, Planning inputs, production data, Actuals from SAP, COGS (Cost of Goods Sold) values and third-party systems to bring a proper MIS to the management which user can define.