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Masco Cabinetry BCG Cost Management

Masco Cabinetry BCG Cost Management. Finance Offsite March 2010. Organization Chart. Cost Management. Full-Time 21 Part-Time 1 Contract 5 Total 27. Key Responsibilities:. Cost Management. Cost Management

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Masco Cabinetry BCG Cost Management

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  1. Masco CabinetryBCG Cost Management Finance Offsite March 2010

  2. Organization Chart Cost Management Full-Time 21 Part-Time 1 Contract 5 Total 27

  3. Key Responsibilities: Cost Management • Cost Management • Maintain integrity of standard cost systems • Standard • Actual • Simulated • Variance calculations and reporting • Inventory analysis and reduction • Sales and contribution margin analysis • Develop cost analysis for new product introductions (incl. MIG grants) • Ad hoc plant operations financial analysis • Supervise the creation of plant operating budgets • Oversight of plant cycle count program • Development and/or review of major capital expenditure requests

  4. Key Responsibilities: Cost Management Shared Services Accounts Payable – maintaining vendor master file (incl. terms), processing invoices and expense reports, monthly journal entries for AP accruals, AP system enhancements/ improvements, 1099’s and check processing Payroll – Weekly hourly and bi-weekly salary payroll, escheatments, garnishments, monthly journal entries and reconciliations (vacation, bonus, profit sharing, commissions, bank recon) Billing – Daily review and distribution of builder invoices, correction of invoicing errors (back-out and re-issue), maintaining progress bill system

  5. Key Personnel Cost Management David Lahie (Dir. Cost Management) Experience – Masco (6 years) Builder Cabinet Group Director FP&A and Director Cost Mgmt. Ford Motor Company (14 years) Global Marketing Controller, Finance Mgr. e-business, Corporate Business Planning, Investment Analysis, Accounting, Information Systems Education - B.Sc., McMaster University (Canada) M.B.A., McMaster University Bryan Whitaker (Mgr. Cost Management, MI) Experience – Builder Cabinet Group (5 years) Senior Cost Analyst and Mgr. Cost Accounting Previous Positions Controller, Plant Controller, Financial Analyst Education - B.B.A. Accounting, University of Toledo M.B.A., Western International University C.P.A.

  6. Key Personnel Cost Management Mark Lake (Mgr, Cost Management ,Texas) Experience – Builder Cabinet Group (5 years) Lead Cost Analyst and Manager Cost Accounting in Texas Previous Experience Controller, Manager Cost Accounting Education - B.S. Accounting, Oklahoma State University M.S. Accounting, Oklahoma State University Susie Campbell (Finance Manager – Payroll, Billing ) Experience – Masco (24 years) Builder Cabinet Group – Finance lead on ERP implementation Texwood Industries – Controller with G/L, AP, AR, payroll and billing responsibilities Education - Partially completed Accounting, University of Texas Arlington David Kallsen (AP Supervisor) Experience – Builder Cabinet Group (8 years) Customer Care, Accounting Specialist (AP), IT business analyst, AP Supervisor Previous Experience (Dana Corp., Military) Project engineer, Quality engineer , Nuclear reactor operator Education - B.A., Bus. Mgmt./Org. Development , Spring Arbor University

  7. Key Issues: Cost Management • Oracle system • - learning curve • - processing speed • - multiple systems inter-facing with Oracle (Friedman, JDE) • Internal Control – cycle count program completeness • Fully Integrate counter-top business • Major architecture change implementation (QBAC) • Masco Cabinetry integration • Improve operations reporting (daily, weekly) • Improve/Change Operations budgeting/standards roll process

  8. Key Performance Measures: Cost Management Shared Services (per week) 20092010 Accounts Payable* Invoices per FTE 149 151 T&E per FTE 15 15 Total per FTE 164 166 Payroll Payments Processed* * 3,235 2,990 Payments per FTE*** 518 498 Billing Invoices per FTE 3,614 4,102 Ratio of credit memos to invoices 1.4% 1.8% * Excludes TFI * *All but 70 per week are direct deposit *** Includes plant time and attendance data entry

  9. Cost Management • Oracle: • Mt. Sterling • Culpeper • Los Lunas • Duncanville • Cedar Hill • Legacy AS400: • Jackson • Mt. Jackson • Atkins MBCG Costing Major Systems

  10. MBCG Costing in Oracle Cost Management Outside Data Sources Oracle Data Sources Component Plants Assembly Plants • Budget Files: • Labor Rates • Labor Efficiency Targets • Overhead Rates • Yield / Scrap • Materials Costing Material Costs of Purchased Items B Material Costs of Purchased Items Material Yield & Scrap Loss A Material Yield & Scrap Loss Labor Routings & Applied Overhead Labor Routings & Applied Overhead BOM Structure BOM Structure A Item Attributes: Species, Style, Size Item Attributes: Cabinet Type, Species, Style, Customer Options B Component Product Cost C Cabinet Standard Product Cost

  11. MBCG Costing in Oracle Cost Management General Ledger Financial Reporting Standard Cost of Product C Inventory Management Shop Floor Transactions Reconciled Perpetual inventory Value Production Reporting / Variances

  12. MBCG Costing in Oracle Cost Management

  13. MBCG Costing in Oracle Cost Management

  14. MBCG Costing in Oracle Cost Management

  15. Critical to Quality Cost Management • Month End closing timeliness and accuracy • Transactional timeliness and accuracy (payroll, billing, AP) • Appropriate AP days and Inventory days on hand • Timely business oriented explanation of cost variances (OR’s) • Improved Cost of Sales forecasting • Product profitability and sales analysis (incl. new product) • Budget process improvements

  16. Masco CabinetryBCG Cost Management Finance Offsite March 2010

  17. Cost Management Vision Statement – Finance Finance will be an integral part of the decision making processes and will be viewed as a value added contributor to its customers with a passionate focus on teamwork, proactive decision support, continuous improvement and positively impacting our company.

  18. MBCG Costing in Oracle Cost Management • Advantages: • Allows detailed market and region analysis • Allows multiple standard costs for same item (recognizes regional assembly cost differences) • Tracks costs within an individual organization to the detailed cost element level • Maintains multiple cost types (Standard, current / pending, previous years, etc.) • Maintains Item Attributes for each BOM component • Allows Modular month-end close • Limitations: • System performance (processing speed) • Does not maintain elemental costs across organizations • Requires some manual interaction / maintenance • Due to batch processing, financial information may be behind product flow during the month • Limited ability to perform mass updates / uploads

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