1. Cost Management and Control Seminar
The Holcim Group and Its Costing System
suppliers of
cement
aggregates (crushed stone, sand and gravel)
ready-mix concrete and asphalt
Related services.
70 countries on all continents,
90,000 employees
2006 Revenues: $ 21,825 M
Group B31 Aldo Gallo Cáceres - Félix Morán Subía - Thiago Macitelli

2. Holcim Group Figures and Value Chain
+ 1050%
Established Markets
Emergent Markets
+ 480%
1980 Employees 18734
2006 Employees 90000
1980 Revenues $ 2,209 M
2006 Revenues: $ 21,825 M

3. Cement Production Process
Main Cost Center Classification
Main Cost Accounts
Corporate
Manufacturing
Corporate
Logistics
Marketing
& Sales
Administration
Code: 100
RM Extraction
Code: 200
RM Preparation 1
Code: 400
Clinker Production
Code: 500
Cement Grinding
Code: 600
Dispatching (no main)
Code: 300
RM Preparation 2
Pre-process Cost Centers:
Correctives.
Gypsum and additives.
Mineral Components.
Power Generation.
Auxiliary Cost Centers:
Alternative Raw Materials.
Alternative Fuels.

4. Right Assignation of accounts and cost centers.
Costing System
Process Costing
Major Guides of the Costing System:
Employee`s input:
Cost Centers.
Accounts codification.
General required description of the movement.
The accounting software (SAP):
It has an internal assignation process, accounts are already internally tagged as: variable cash cost, Fixed cash cost, and others related.
Key Issue: (Employee's Main Role for the success of the Costing System)
Right Assignation of accounts and cost centers.

5. Cost Drivers Main Information Behind
Cost center’s impacts on total cost
Relevant costs
Main opportunities for cost reductions.

6. How to Choose a Costing System
An accounting system established to monitor a company's costs, providing management with information on operations and performance.
Process costing
High volume
Are identical
identical amount of direct labor
Repetitive operations
Job Order costing
typically low volume
Tend to be unique (custom order)
different amount of direct material
different amount of direct labor

7. Decision making planning and control process
Cost drivers
e.g. Process improvement, change raw materials, etc.
Performance indicators
Adjust the plans
From: Drury (2004). Management and cost accounting. 6th edition. ISBN

8. Decisions Making Process Using Costing System

9. Decisions Making Process Using Costing System

10. Possible decisions
Process improvement (e.g. reduce the number of stops by increasing preventive maintenance)
Change fuel supplier to reduce costs
After selecting and implementing the decisions they performance has to be monitored in the same way
The new performance indicators could be compared with the previous period
If necessary, corrective action plans could be taken