Lumag

OUR CLIENT

Lumag has over three decades of expertise in the production of friction linings, brake pads, and other innovative automotive products that ensure optimal driving comfort and safety. Their state-of-the-art 19,000 square meter factory in Budzyń, near Poznań, Poland, provides a competitive edge through strategic logistics and advanced production technologies.

BUSINESS CHALLENGES

Operating in a dynamic and competitive market, Lumag required continuous visibility of up-to-date financial results. Accurate, real-time profitability analytics were essential to support rapid development of what-if scenarios, enabling Lumag to maintain competitiveness while delivering high-quality, innovative, and safe products.

The existing process, reliant on multiple spreadsheets, lacked the speed, accuracy, and consistency needed.  Lumag sought a solution that would offer an aggregated, consistent view of financial performance to support planning and scenario analysis, crucial for informed business decisions.

SOLUTION

Lumag engaged Profit& to deliver Financial Planning and Analysis on the Anaplan Planning platform.  The goal was to provide a single data source for financial planning, budgeting, cost and profitability analysis.  Anaplan’s powerful, flexible modelling capabilities, means that it was an ideal choice to support Activity-Based Costing (ABC) for profitability analysis and what-if scenario planning.  Developing these finance models on the Anaplan platform would ensure real-time visibility of financial performance by integrating key data, plans, and people in a dynamic planning and reporting process.

Sales Planning

The sales planning module enhances volume planning by customer and product using historical data, allowing quick and accurate plan creation through both a top-down or bottom-up processes. The pricing engine, based on the latest price book, can override or apply periodic inflation increases.  Various scenarios, including changes in volume, prices, and foreign exchange rates, can be run to reach a consensus on the final revenue plan.

Cost Allocation and Profitability Analysis

Profit&'s solution automates cost allocation and profitability analysis by product and customer for actuals, plans, and what-if scenarios. ERP data, combined with cost and drivers, powers the ABC allocation engine, enabling clear and transparent management of allocation paths. Multiple validations ensure accurate and reliable allocated costs.  Fully allocated costs, combined with sales results, provide a complete profitability view by product and customer.

What-if Scenarios

The solution supports scenario analysis by allowing instant recalculations of planning variables such as prices, volumes, material costs, changes to the bill of materials, energy or staff costs, and foreign exchange rates.

Data Integration

A critical aspect of the solution was to create a single data source for planning and actual results analysis, achieved through automatic data feeds to the Anaplan platform.  This eliminated the risk of inaccuracies from manual interventions, ensuring data integrity and up-to-date financial visibility.

BENEFITS

The Anaplan solution developed by Profit& has significantly shortened Lumag's finance process times.  Variance analysis and reporting which previously took one week, now take just four hours. Profitability analysis, which had required two people for a week, is now completed by one person in a single day, reducing the effort by more than nine man-days per month.

In addition to efficiency gains, Lumag enjoys greater confidence in the accuracy of outputs.  Automatic data feeds have eliminated manual errors, and the clear visibility of allocation paths in the Anaplan profitability models delivers easy traceability of results.  

Powerful What-if Scenarios

The Lumag finance team has dramatically improved their ability to support customer negotiations.  Based on accurate product unit cost information, they can assess the impact of different volume orders or product variations on demand, ensuring that every single order is profitable.

The Finance team is better able to support many other business decisions because less time spent on data processing means more time for analysis to support decision makers.  Decisions such as the annual salary review can be accurately modelled at speed to see the impact on profitability.  The same is true for changes in the cost base, such as energy costs, as they happen, or to assess potential changes to mitigate future risks. This is only possible due to the accuracy and speed of scenario planning.