Understanding Production Variances
SAP provides some very good tools for reviewing and managing production variances. In this session we’ll look at how actual costs are assigned to orders and how those costs are compared to a standard for determining the variances. Our focus will be the process of variance calculation and how the calculated variances are categorized. We’ll review target cost versions to show how the variances calculated can be different for each version. We will explore how each version can be used to help manufacturing fully understand and manage the variances. The reporting of scrap is a normal part of production, and this will be explored to show how the effects of scrap impact order variances. We’ll devote a portion of the session to sharing experiences with managing production variances and look at practices that provide the most benefit to your company.
