True profitability analysis integrating MES, historian, and ERP data to replace standard costing assumptions.
Industry: Food Manufacturing
Quick Facts
| Attribute | Value |
|---|---|
| ERP | Microsoft D365 (Cloud) |
| MES | GE Plant Applications |
| Historian | GE Proficy Historian |
| Front End | FrameworX dashboards (costing analysis) |
| PLCs | Rockwell Automation |
| Scope | Cost modeling based on years of historical production data |
| Impact | 10-12% bottom line improvement |
The Challenge
Challenge: ERP system used standard costing models with assumptions that varied up to 50% from reality. With sales demand exceeding capacity, management needed to decide which orders to accept or decline, but ERP data couldn't reliably show true profitability by SKU.
Specific pain points:
- Standard costing assumptions varied up to 50% from actual costs
- Sales demand exceeded production capacity
- No reliable data to prioritize which orders to accept or decline
- Some SKUs and customers appeared profitable but actually lost money
- ERP costing didn't account for real production factors
Impact: Without true cost visibility, company was accepting low-margin or money-losing orders while potentially declining profitable ones.
The Solution
Architecture
| Tier | Component | Capabilities |
|---|---|---|
| ERP | Microsoft D365 (Cloud) | Standard costing, orders |
| MES | GE Plant Applications | Production execution data |
| Historian | GE Proficy Historian | Time-series production metrics |
| Analytics | FrameworX Dashboards | True SKU profitability visualization |
| Control | Rockwell PLCs | Production lines |
Data Integrated for True Costing
| Data Category | Source |
|---|---|
| Raw material consumption | MES/Historian |
| Packaging usage | MES |
| Changeover times | Historian/OEE |
| Waste and rework | MES |
| OEE and production states | Historian |
| Standard costs | ERP |
Costing Intelligence
- Actual cost per SKU calculated from real production data
- Years of historical production data modeled
- Visualization enables sales and operations decisions based on actual margins
Key Enablers
FrameworX capabilities that made this solution possible:
| Capability | Application |
|---|---|
| Real-time Integration | Production metrics combined with ERP costing |
| Costing Dashboards | Visualize true SKU profitability |
| Flexible Data Model | Grows as more production metrics are tracked |
| Historical Analysis | Years of production data for accurate modeling |
The Results
Exposed Hidden Losses — Identified SKUs and customers that appeared profitable but actually lost money
Prioritized High-Margin Orders — Enabled sales to prioritize profitable orders during capacity constraints
10-12% Bottom Line Improvement — Simply by shedding low-margin products
Sales Negotiation Tools — Provided sales and marketing with real cost data for customer negotiations
This case demonstrates production costing analytics replacing ERP standard assumptions with actual MES and historian data for true SKU profitability.
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