What the Factory Controller, or Plant Controller, do?
This post is a free and authomatic Google translation from Portuguese to English for this reason some poor translation can occur but hopefully w// important loss..
#plantcontroller #controller #controllerdefabrica
What is the work of a Factory Controller, or Plant Controller?
Plant Controller is a title that many companies attribute to the professional responsible for controlling the factories. Plant Controllers are positions that are widely used in American multinationals and sometimes by European and other reagions also.
We find that position with this or another name also in good local companies. In some companies there is the position of Cost Manager, which is similar to the work of the Plant Controller, but the activities of the Factory Controller go beyond the work of the cost manager.
Sometimes this position is subordinate to the Financial Director or even to the Operations VP, But it is very common for Plant Controller to respond directly to the aforementioned professionals, but to respond indirectly, or as it is called in multinational companies, through a "dotted line" to managers in the main areas that will benefit from the work of Plant Controller.
In a well-structured Factory Controllership can make a valuable contribution to the company, but there is some difficulty in starting this area due to the lack of professionals experience in this position.
But what is the work of the Plant Controller?
Through the figure I created below I will briefly comment and without exhausting them the main responsibilities of the Plant Controller.
Product Costs Product
costs must be controlled strategically. There should be greater emphasis on strategic cost management, which implies focusing on the continuous intelligent reduction of costs through the application of the best techniques and alternatives that minimize costs.
Special attention should be paid to the costs of raw materials, packaging and other costs that are usually overlooked by university professors and theorists who often know little about the reality of companies' shop floors. More about COSTS
TITO Cost Systems - Trash in - Trash out
Environmental Costs
These costs form a new category that needs to be monitored, understood and, above all, managed in order to minimize the environmental impact. Environmental cost indicators should be monitored systematically.
Yield Analysis
This analysis concerns the input / output ratio in the production lines. The input / output ratio will be translated as a percentage always less than 100%. Monitoring this relationship is a key factor in controlling productivity and optimizing processes. To see more about INCOME link below:
Costs - Yield production calculation / What books don't talk about
Installed capacity utilization
The systematic monitoring of installed capacity utilization is another key factor for the efficiency of industrial plants. Low capacity utilization will result in unpaid fixed costs and inefficiency in the use of resources. However, very high capacity utilizations, or close to 100%, can subject processes to risks because they do not have a lung to compensate for any problems that occurred in production.
Budget Control
Companies must maintain close control over budgets, which must occur at the level of account, cost center, product and other elements. You should also plan for various indicators such as IOE, Yield, Capacity utilization and many other non-monetary performance indicators.
See also about Budget
BUDGET and the role of Controllership
Investment Plan (Capital Plan)
Companies must plan their investments in detail, which will imply opening investments by category: capacity increase, technological improvement, replacement, environment, etc. Investments must be listed separately. As investments are made, a specific control must be opened for each one. Investments above a certain amount must be justified by preparing an economic feasibility study. In the case of strategic investments, there will be no economic justification. See also about Capital Plan or CAPEX
What is CAPEX? What is OPEX?
Projects and economic feasibility studies
Must be carried out as mentioned above, or whenever a detailed analysis needs to be prepared to support certain strategic decisions.
Continuous Improvement
Programs Continuous improvement programs will involve identifying projects where potential improvements can be achieved. For each project a very detailed control must be done and accounted for systematically, which can be in periods of maximum 30 days.
ERP's - Efficiency in use
Efficiency in the use of integrated systems must be ensured. For this, periodic reviews, systems audits and consultancies should ensure that the systems are being used effectively. The Key User figure is highly recommended.
KPI´s performance indicators
Robert Kaplan asked about the accounting of the future replied that it would be an accounting of indicators, and I add that in this accounting the figures will be consequences. Therefore, if we want to control and act on causes, we must act on performance indicators. In order to act on performance indicators, it is necessary to continuously monitor them, determine strategic goals and work hard to achieve them. More about KPI´s at the link below
Financial and non-financial KPIs
Maintenance Costs
This is an area that is little explored and that can bring huge hidden costs to companies. Many companies have huge corrective costs that could be much lower if the company invested appropriately with preventive and predictive costs.
Inventories and Supply Chain
Inventories need to be controlled so that differences are eliminated. In current times general inventories that serve to correct errors over a long period no longer make sense. A rotating inventory system is required to ensure daily inventory accuracy.
Ensuring efficiency in the Supply Chain is an essential but complex task. The factory controller should monitor and contribute to this.
Quality Costs
Quality costs, whose better nomenclature would be non-quality costs, consist of key information when properly measured, monitored and used. Thus, a system that identifies prevention costs, evaluation costs, costs of external failures and costs of internal failures will be of great value and will represent an important contribution of the Plant Controllership area. See this post on QUALITY COSTS - Click on the Link
Quality Costs - Cost Management Tool
Conclusion
The above responsibilities alone represent little, but the set of responsibilities exercised efficiently will be a key factor for the factories to follow the path of efficiency and operational excellence.
These responsibilities must be added to others depending on the characteristics of the company and its processes.
Factors such as training with the formation of a prepared team, good use of the integrated system and contact with the factory floor are also essential elements.
Tools such as the Balanced Score Card, Activity-Based Costs, Target Costing can make a good contribution.
Periodic reviews, usually monthly. Strict monitoring and working together with the factory managers will be part of a large group that will be able to place the company with a select group of world-class companies, and in this context the Factory Controllership assumes a leading role. UNMISSABLE :
What are Discretionary Costs and Expenses? <<< click
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