] Real Costing Raul Morales Business Development

Real Experience. Real Advantage. [ 2

[ Sugar Historical Prices 3

Real Experience. Real Advantage. [ Corn Historical Prices 4

Real Experience. Real Advantage. [ Coffee Historical Prices 5

Real Experience. Real Advantage. [ Oil Historical Prices 6

Real Experience. Real Advantage. [ Exchange Rate Changes 7

Real Experience. Real Advantage. [ Back to Base 8

Real Experience. Real Advantage. [ We see new external factors affecting business  Globalization – plants in different locations  Exchange rates fluctuations – markets integration are changing exchange rates in real time  Automation – different plants, different productivity  Logistics integration - new routes, several vendor options and cost fluctuations  Energy – oil prices and energy prices are changing  Commodities – raw material price is changing daily  Risk and Hedge Management 9

Real Experience. Real Advantage. [ 10 Learning Points  What is an economic event?  Nature  Date  Amount  Now technology is allowing to register economic events in real time and apply for two important objectives:  Legal requirement, Banks, Stockholders, Government  Monthly, Average or Standard, Not accurate for decision Making  Management decision making process  Real cost, Trustable information

Real Experience. Real Advantage. [ Detailed Standard Cost x Real Cost Global Standard Cost per Material and Plant Month Material Ledger is not activated No Real Raw Material variations No Real Labor variations No Distributed Overhead per plant No General Manufacturing Costs No Multilevel Actual Products Real No Finished Products No Multicurrency No tools to adjust planned 11 Detailed Monthly Real Cost per Material and Plant Activated SAP Material Ledger Real Raw Material variations Real Labor variations Real Overhead per plant General Manufacturing Costs Multilevel Actual Products Real Finished Products Multicurrency Adjust of planned near of real

Real Experience. Real Advantage. [ 12 Material Ledger/Actual Costing  Carry material prices in Multicurrency and actual costing  Up 3 currencies/valuations  Covers:  Inflation  Exchange Rates  Carry your inventories in 3 different valuations  Legal Valuation  Valuation for reporting  Profit center valuation  Actual Costing calculates an actual price for each material  Valuation using a moving average price results in the following:  Goods receipts are posted at the goods receipt value.  The price in the material master is adjusted to the delivered price

Real Experience. Real Advantage. [ MARKETING QUALITY LOGISTICS TECHNOLOGY HUMAN CAPITAL CUSTOMER SERVICE MARKETING QUALITY LOGISTICS TECHNOLOGY HUMAN CAPITAL CUSTOMER SERVICE Ohter Profitability Analysis Revenue (+) Cogs (-) = GM Overhead (-) =EBITDA

Real Experience. Real Advantage. [ It is not an ERP activation it is a culture change  Real costing requires:  Material Ledger activation/Actual Cost  Process review – procurement, production, warehouse management, transportation, sales, profitability analysis  Master data review – materials, bill of material, final products, co products, routes  New functionalities activation – material ledger, standard transportation, bill of material, standard warehouses, production orders  Strategic understanding of Supply Chain Process 14

Real Experience. Real Advantage. [ Material Ledger 15

Real Experience. Real Advantage. [ Actual Costing 16

Real Experience. Real Advantage. [ Profitability Analysis 17

Real Experience. Real Advantage. [ Product Costing Planning 18

Real Experience. Real Advantage. [ Actual Cost Component Split 19

Real Experience. Real Advantage. [ Plant Price 20

Real Experience. Real Advantage. [ Material Price Analysis 21

Real Experience. Real Advantage. [ Material Price Analysis 22

Real Experience. Real Advantage. [ 23

Real Experience. Real Advantage. [ Price Analysis 24

Real Experience. Real Advantage. [ Integrating Economic Events  Trustable information for decision making process  Critical information available in real time  Process automation  Focus on process improvement  Scalable for more complex costing models 25

Real Experience. Real Advantage. [ Colombian Coffee  Founded in1927 Coffee Producers Union  Non Profit Organzation  Considered the best coffee around the world  Supporting more than 500k families  1,000 SAP Users  Version 5.0  New controlling culture, based on Real Cost and Shared Services 26

Real Experience. Real Advantage. [ Large Corn Ingredients Company  More than 2,000 SAP uses  10 production plants  Mexico, USA and Canada  Guadalajara Mexico and Chicago  Review current Costing Model  Activating Material Ledger and Product Costing 27

Real Experience. Real Advantage. [ ]  Thank you for participating