How did the world's largest bike manufacturer automate micro-level costing?

The context

Client and industry

The client is the largest bike manufacturer in the world.

To scale production and reach its next stage of growth, the company needed more efficiency in every manufacturing process. Costing was the most critical gap. The company already ran SAP ERP across its manufacturing facilities.

The problem

The challenge

Micro-level costing was a manual job that took days and was prone to errors.

Despite using various ERP software, the costing team spent days on micro-level costing and on feeding the approved data into the system. Thousands of data points depended on manual work, so errors were almost certain.

Critical cost data across all manufacturing facilities was scattered, decentralized and not synced. That stopped the company from using its cost data for future growth initiatives. Cost visibility was scarce at the macro level and cost control was not streamlined.

The problem

Why existing methods fell short

The ERP held approved figures but not the micro-level costing behind them, and the manual process around it created five problems:

• No real-time alerts on cost drivers or when a cost threshold limit was breached
• Error-prone manual processes that took undue time and resources
• No uniformity in data, so valuable time was lost extracting insights
• No centralized data, which hampered analytics and the study of future cost trends
• No micro-level costing data in SAP, which hampered cost reduction planning

The solution

How Cost It Right solved it

Cost It Right automated the client's entire cost management process on an on-prem platform connected to SAP ERP.

CIR is a cost automation and control solution. Here it acted as a bridge solution and integrated with the SAP ERP the client already used, so the existing system stayed in place.

• The team can now run a range of what-if scenarios and apply delta changes in a few clicks.
• The entire repository of costing data is centralized.
• That central data is now used for predictive analytics, procurement and vendor management, and strategy-driven cost reduction.

The impact

Results and business impact

Cost inflation impact analysis for more than 30,000 components now takes 15 minutes, saving 1,920 man-hours.

• 15 minutes for cost inflation impact analysis of 30,000+ components, saving 1,920 man-hours
• End-to-end cost automation that built a secure costing ecosystem and saved substantial enterprise resources, time and money
• 100% of costing data centralized, forming a strong base for data intelligence

The client now works in an end-to-end automated costing ecosystem that provides easy, quick and reliable cost automation and control.

The impact

Key takeaways

• Micro-level costing done by hand next to an ERP does not scale: thousands of manual data points make errors almost certain.
• An on-prem costing platform can work as a bridge alongside SAP ERP instead of replacing it.
• Centralizing all costing data turns it into a base for predictive analytics, procurement and vendor management.
• With automated what-if scenarios, a cost inflation impact analysis across 30,000+ components becomes a 15-minute task.