Industrial costing model based on the ABC approach

Mission

Support the Finance Department of an industrial player in the public sector in implementing an ABC (Activity-Based Costing) model, enabling optimization of cost management and improved strategic decision-making.

Objectives

• Calculate the full costs of its products and services
• Understand the key variables impacting its costs
• Have reliable data for an accurate allocation of costs to its distribution channels

Actions carried out

• Map expenses to identify the main sources of costs.
• Design a target activity model integrating process and activity mapping.
• Value the full cost model (resources, activities, services) for a structured view linked to the P&L.
• Implement an interactive dashboard enabling detailed cost analysis by product.

Results

• Better understanding of costs: the client now has a clear and detailed view of its cost structure by product.
• Informed decision-making: the tool facilitates traceability and auditability of the model, providing a solid basis for pricing strategy and resource allocation.

Success factors

• Interactive dashboard: an intuitive and easy-to-use tool, tailored to the client’s needs.
• Collaborative approach: active involvement of finance and business teams to ensure buy-in and the relevance of the model.
• Sector expertise: in-depth knowledge of industrial challenges and the specificities of the public sector.

Key figures

• 6 staff members (finance and business)
• 4 expert contributors (management control, project management, industrial production)
• €53M in annual costs analyzed for an organization of 100 employees.
• 3 months: from design to validation of a valued model