INTRODUCTION MANUFACTURING COST MANAGEMENT & BUDGETARY PLANNING
Manufacturing industries faced pressures in managing costs and ensure efficiency in its operation. This is due to possibility of rising costs which causes diseconomy of scale which caused competitive disadvantage.
This intensive two-day program equips manufacturing professionals with the knowledge and skills to effectively plan, manage, and control costs within a manufacturing environment.
It covers practical cost management techniques, budgeting strategies, and performance monitoring tools to improve profitability and operational efficiency.
Who should attend: Production & Manufacturing Managers, Budget & Financial Planning Executives, Operations Managers, Engineers, Purchase, Supply Chain & Procurement Professionals, Supervisors involved in cost control and planning in manufacturing environments. Production & Manufacturing Managers. This is also beneficial to Cost Accountants & Management Accountants who wish to refresh knowledge on cost management concepts and its application.
LEARNING OBJECTIVES
On completion of the programme, participants will be able to:-
- Identify the key components of manufacturing costs and their drivers.
- Develop the correct manufacturing costs list
- Apply cost allocation and cost control techniques like material costs tools and value drivers manufacturing toolkits to improve operational efficiency.
- Develop comprehensive manufacturing budgets aligned with production targets.
- Interpret cost variance reports and take corrective actions for budget deviations.
- Integrate cost management strategies into decision-making for sustainable profitability.
TRAINING APPROACH
Where appropriate, training delivery approaches will include the following:
- Online Lecture & Videos
- Online faciliated Group Discussions & Spot Quiz
- Practical exercises and case studies.
COURSE OUTLINE
Day 1
Module 1: Introduction and course objectives
- Importance of cost management in manufacturing
- Link between cost control, budgeting, and profitability
- Traditional costing problems in manufacturing business ie wrong costing techniques, in accurate costs and pricing
Module 2: Manufacturing Cost Components and Information systems
- Overview of manufacturing business information and decision making process
- Manufacturing business flow process and documentations
- Direct materials, direct labour, manufacturing overhead
- Fixed vs variable vs semi-variable costs
- Understanding nature/cost behaviour for calculation of break-even points
Module 3: Manufacturing costing techniques
- Scenarios and format – When to use job costing, batch costing
- Standard costings and importance in manufacturing business
- Absorption versus Marginal costing concepts, formulas
- Activity Based Costing (ABC) and applications
Module 4: Cost Allocation & Absorption
- Cost centres and cost drivers
- Absorption costing vs activity-based costing (ABC)
- Overhead allocation in multi-product manufacturing
Module 5: Cost Control Mechanisms
- Setting cost standards
- Monitoring resource usage, wastage control and identify labour productivity improvement
- Lean manufacturing & waste reduction
Case Study & Group Exercise
- Identifying cost leakages in a production process
- Developing practical cost-saving solutions
Day 2
Module 6: Budgeting Fundamentals in Manufacturing
- Types of budgets (operational, cash flow, capital)
- Aligning budgets with production plans
- Rolling budgets and flexible budgeting
Module 7: Developing a Manufacturing Budget
- Material purchase planning
- Labor cost forecasting
- Overhead budgeting
Module 8: Variance Analysis & Corrective Actions
- Material, labor, and overhead variances
- Investigating causes of budget deviations
- Decision-making using variance reports
Module 9: Integrating Cost Management into Strategic Planning
- Linking cost data to pricing and profitability
- Using KPIs for performance measurement
Module 10: Final Workshop & Action Plan
- Participants develop a mini cost & budget plan for their department
- Sharing best practices & Q&A
