Scenario Analysis and Decision Support
Today’s markets are unpredictable and business leaders need tools that help them make informed decisions. Analyzing potential scenarios to determine how future events could affect product costs is an integral part of decision-making for every aspect of manufacturing from production scheduling, product mix and sales price.
More structured systems like traditional ERPs are not equipped to perform comprehensive product cost scenario analysis, so often companies turn to spreadsheets to build models that can examine the affects of potential changes. While there are benefits like flexibility and familiarity to spreadsheets, problems with data integrity, inconsistent logic, and sharing results make spreadsheets less than desirable.
With ImpactECS, scenario analysis models coexist with product costing models on one platform. Building analysis models is as simple as cloning existing product cost models and adjusting the factors you wish to test. Using the same logic and data as the product cost model ultimately leads to more accurate predictions and allows business leaders to have more confidence in the results.
In the Scenario Analysis model, variables tested include changes to processes, bills-of-material, variable costs, and product mix. Creating scenario analysis models is also quite valuable in making decisions on outsourcing or subcontracting parts of the manufacturing process. The real advantage of ImpactECS for decision support is that you can test any variable in the model with the confidence that your results are isolated to reflect that change.