With 30 years of history, Quatá, a dairy products manufacturer, impresses with its potential and speed of growth. The company, founded in 1990 in the countryside of São Paulo, started its operations with only 16 employees and a processing capacity of 3,000 liters of milk per day. Today, the company is responsible for more than 1,600 jobs and has a production capacity of around 1.1 million liters of milk a day. The industrial plant has expanded and currently six factories are producing the various goods in the industry’s portfolio, which includes dry and refrigerated lines among cheeses, kinds of milk, creams, zero lactose options, and specialty cheeses.
Growth is undoubtedly one of the greatest goals of any business. However, it is a process that brings with it great challenges. And for Quatá it was no different. The company uses in its management one of the best ERPs available in the market, TOTVS. However, even with all its versatility, the platform proved to be insufficient to offer the level of detail required to control the indirect costs of such a complex industry. Thus, to support the cost management process, Quatá employed in its logistics and distribution areas a costing model partially by absorption and by activities, using Excel spreadsheets.
Even with the association of these resources, the company still had difficulty in visualizing the costs of all the processes accurately and productively. With a varied portfolio and different production methods, one of the biggest challenges was to efficiently measure profitable and loss-making products. In this context, the production of the industry’s refrigerated goods line proved to be particularly challenging. With an almost manual process for manufacturing their specialty cheeses, accurate costing was not an easy task, but it was a must.
MyABCM has provided Quatá with the possibility of implementing a new cost management model, capable of serving all sectors of the business, integrating smoothly with the ERP already in use. The cost modeling by activities (ABC/M) is now applied from the industrial plant, in the Production area, to the Commercial sector (covering delivery, logistics, and customer service) and also in the back office and the correct allocation of the indirect costs of the business.
The company, which does accounting and management closing every 5th business day, uses MyABCM to extract various dimensions of analysis, which are then published at a very high level of detail. Through integration with Power BI, the findings are quickly made available for viewing by the entire company, which can use the data provided to improve the decision-making process.
Quatá is a company that is growing a lot and it is essential to understand where it is making and losing money, so one of the company’s greatest gains was in the diversity of the performance information and its analysis. And the outcome of this process is the empowerment of the management teams, who now have much more control over the business performance, since strategic decisions are taken based on the data provided by the software. Among them, it is worth highlighting the contribution margin analysis, which is now performed by Product, Channel, Customer, Management, Salesman, Representative, and Region.
With this detailed vision, Quatá has gained an important competitive advantage. The tools of the MyABCM solution are also used for Planning and Budgeting, in addition to providing historical budget data and solutions for scenario simulations that are fundamental in pricing studies and in obtaining sophisticated forecasts.
This is another benefit of great prominence for the organization. With the agility of the market transformations in the dairy segment, being ready for all the possible unfolding of the sector facing economic and supply chain fluctuations put Quatá ahead of the competition. And it is not only in preparing for market fluctuations that the resources for costing, simulation, and scenario forecasting have optimized Quatá’s operations. The industry launches several products every year. As such, the previous studies with the application of target costing techniques produced with the support of MyABCM are a fundamental pillar in the decision-making process regarding these new launches.
According to the Controller Manager, Jullian Soares, who was responsible for the implementation of costing in Excel and later led the MyABCM project at Quatá, “The model has to make conceptual sense for the business. Today, we have everything tied to MyABCM: understanding key business dimensions, individual goal analysis… I can say that without MyABCM, it would be extremely difficult today to manage the organization with the agility that it demands.”
It is also important to note that the support of the MyABCM support team was evaluated by Quatá’s board as fundamental throughout this process. Not only for their experience with the platform itself and its tools but also their knowledge in the implementation of the activity-based costing method and expertise with 100% dedication focused on the topic.