Case Study 2 - India Based Manufacturing Company

Business Situation

An India based automotive manufacturing company was in the process of a large-scale expansion. Due to space constraints, the Machine shop, CNC machines and the Gear Box Assembly Line were shifted to a hired place (Unit 2), away from the main plant. The workers for this manufacturing activity are also transferred along with managerial staff.

Challenge

The company was looking for financial services help – they needed a firm to independently manage the material accounting for Unit 2, so the company could focus on their core manufacturing activities.

Our Services and Solution

The company gave a detailed situation brief to Team Levare’s trained and experienced accounting professionals. The Team was also given a tour of Unit 2 so they could understand the entire process. The Team identified all areas which could be outsourced.

Based on the study the following processes were outsourced to Levare:

• The entire material accounting activity at the new site
• Receipt of castings and components required for machining and assembly of Gear Boxes
• Physical verification of the material received and reporting of any discrepancies to the main plant
• Issue of material to production based on the daily production plan
• Dispatch of Gear boxes manufactured at Unit 2 to the main plant based on the daily schedules
• Maintenance of records for the purpose of Excise authorities, including filing of monthly returns
• Continuously updating management regarding all transactions at Unit 2

Results and Benefits

• The company can concentrate on manufacturing – its core activity
• The company can eliminate its separate store and excise department at Unit 2
• The company receives a continuous information update about material consumption, including production wastage at Unit 2
• All material discrepancies are promptly identified, communicated, and investigated
• The company achieved significant savings in Unit 2 staff costs, which were higher than Levare’s professional fees

Testimonial

“Levare Consultants Pvt. Ltd. has been associated with our company for a long time. Their contribution has been of immense value, especially in the assignments of the Material accounting system, Material accounting (including excise records) and our Inventory Audits.”
– Director Materials, Automobile MNC