There is a lot of information today inside the Companies.

Information provided from many systems (with backbone the ERP) which allows the departments to run the daily normal operations. But when we arrive in the Top Management level where the decisions are taken, we see that the information to serve the tasks of the Top Management is very limited. For example the financial statements of the Company are generated every 3 months. This can be acceptable in stable economy times. But in our times with unstable economic, very floating environment where sale prices, quantities, raw materials varies a lot inside an economic period and the profit margins fall under the global competition, it is necessary to improve the information and the understanding of the company in the Top Management level, so to serve the purpose of better understanding, the decision making, fast reaction to the problems and closer control. When the Management can only receive financial results once in a trimester or can’t identify the causes which provoke the problems or to understand quickly what advantages will provide the possible available solutions, then all this cycle is problematic, because the delay in understanding and reaction to resolve the problem is to long for today’s economic situation.

The problem becomes greater when a company produces and sells many different products with different margins, raw material values, and elaboration costs as is the case for the manufacturing industries.

Companies to survive and prosper in the next decade will need to prepare the information framework for the Top Management. This information framework must be designed for the Top Management, to facilitate the understanding of the company, the control, the decision making and the communication with the rest of the company.

Nexoft is offering the consulting and the IT-Solutions to the Top Management to succeed in their today mission.

Nexoft is offering a series of control models and solutions which will radical improve the way that the Top Management understands the Company, its dynamic and possibilities, its resilience to problems, the reasons of the actual results, the weak and the strong points, the real product costs. In this way they will be take more realistic decision and they will be able to react faster in the changes.

Here are some of the possibilities which will be able to use and exploit, to improve the decision making process:

1. To get the financial statements and the profit and loss of each business unit and for the whole company weekly or monthly and not every three months as it is today.
2. To understand the reasons of the financial results which are not possible to be understood from the normal financial statements
3. To understand the real cost of the products without assumptions and simplification averages. The understanding of the exact cost of a product is very critical in the manufacturing industries because determine the sales policies, the development of new products and the strategy against competition
4. To be able to plan the operations of the Company (Purchases, Production, Human Resources, Sales, Machine usage, Expenses, etc.) and to see the result which are generated from the operations. Today the planning of the Company usually is understood as a copy of the financial expenses of a previous year with some simple modifications which are not reflecting the actual reality of the company.
5. To be able to understand the Budgeted Cost of each product and the exact components of the cost. This is done in relation with the Operation Plan from the point 4.
6. To understand the resilience and the results of the Company if various parameters (raw material price, sales price or quantity, production, productivity, expenses) will change.
7. To understand the strong and the weak points of the company. Also the cost or the benefit of such strong or weak points. This will make easier for decisions and corrective actions in the structure of the Company but also in the decision for investments, because will be clear the operating advantages of such investments.
8. To run various IF-what scenarios so to understand how the company will behave under certain structure or conditions.

Except the primary advantages for the top management such approach will bring advantage to the whole of the organization structure like:

• Better understanding the reality
• Faster Reaction to the problems and opportunities
• Better Preparation
• Better Communication through the Company Levels
• Better Collaboration between the different departments, because the impact of their department in the whole will be clear
• Better Participation
• New, more competitive culture

All these topics can be solved today thru the information solution OPIC (Operational Plan and Industrial Costing) of which a short description is attached.

With the use of OPIC the TOP Management:

• Will receive financial results of the activities in weekly or monthly and not to wait e.g. the end of May to get the financial results of the First Trimester. It is late
• To understand fast what went wrong, why and its financial impact
• To take decisions fast , without time lag and to control the results of the decisions that have been taken
• To communicate clearly and in completely acceptable way with the rest of the Company.

Technically the Top Management and the Company will get from OPIC.

1. Product (Final-Intermediate-Raw) characteristics and properties
2. Detail Recipes of how each final and intermediate product is Manufacturing, the material, human and other resources used.
3. Budget Cost of each final and intermediate product, based on an operational plan and financial budgeting
4. Analysis of all the budgeted expenses and budgeted income of the company
5. Analysis of each factor that influence the Product Cost, its percentage of influence and its contribution in the cost (ex. Influence of Direct Labor, Raw material, machine speed and efficiency, Administrative costs, chemicals etc.)
6. Operational Plan which described based on sales forecast, all the necessary operations and resource need, and the result in terms of profit (losses)
7. Utilization of the Resources Analysis (machinery, raw material, human resources)
8. Possibility to divide the year in financial periods down to one week.
9. Actual Sales and the profitability of sales
10. Actual Production with the Profitability of the Production Process
11. Control of the Raw Material Consumption, Waste, Byproducts, Second Quality Products and Quality degradations
12. Actual Profitability and performance, down to One Week Financial Periods
13. Analysis of what went wrong, what went good and its financial impact
14. Possibility to run financial scenarios (simulations) with other financial parameters to study the resilience, the competitiveness or to simulate investments and decisions, before actually executing them

For all of the above the integration to the main system of the company will be necessary for extracting daily or weekly the Production, Sales, Purchasing the Consumption of Raw Materials and the Waste production. In case that any of the above group of information is not available in the main system, OPIC can manage the missing information autonomously.

OPIC is based on efikton® a modular OPEN system, designed to co-operate with all the modern main information systems and has great extensibility. It is not an isolated system, but can be expanded in areas of Production Control, Quality Control, Production Planning, Products Development, CRM, Sales and Inventory Analysis, Innovation Management and Continuous Improvement, Managing Collaboration Processes with Customers and Suppliers, Risk Management and Early Warnings.

Nexoft SRL offers Consulting and IT Solutions for the Top Management of the Manufacturing Companies which radical improves the way that they understand, control, take decisions and manage profitability.