Business Example

The following example shows the entire process flow between an HQ company hypothetically named Sunshine Munich and several other Sunshine companies that all belong to an international group of companies named Sunshine Corporation.

The next illustration shows the flow of a product going through various manufacturing steps in this process:

Shared Services Allocation

Processing starts with the Manufacturing and Overheads Allocation Process segment. This is followed by the allocation of shared services (HR, IT, Finance, and Helpdesk services) provided by Munich, which acts as HQ company to other Sunshine companies that use these services to manufacture their own products (also including Munich in this process).

Shared services are allocated to each product, P1, P2, P3, P4 and P5. For the best representation of this process, the bottom-up approach is used for the production process, including bill of materials, process plans and activities and unit costs. This approach is combined with the top-down approach used in the shared services allocation process.

Having all these process steps aligned, you configure one process that covers the production activities combined with providing services and markup calculation to obtain the revenue for each product and company.

The concrete process is as follows:

  1. In the first part of the process the system performs the following steps:

    1. The joining of manufacturing plans for each product with the Steering Table - Initial and Business Events Data Model Tables

    2. The joining of bill of materials, unit costs and deriving costs and values at activity level

    3. The allocation of operating expenses coming from General Ledger data at product and service level

    4. At the end of this part of the process, costs are consolidated.

  2. In the second part of the process the system performs the following steps:

    1. It defines the end users of shared services.

    2. Then, it determines the costs of each shared service.

    3. At the end of the process, the calculation of markups and taxes of shared services is executed.