What is a Report for Direct Labor Cost by Manufacturing Process?

Direct Labor Cost reports are considered important production reports and are often used by production and plant managers to determine actual versus forecasted labor expenses for each manufacturing process. Key functionality in this type of report shows day rates and average utilization per team member. Figures are shown both for each month as well as year-to-date. On the top of the report, actual is compared to forecast at the plant level. You will find an example of this type of report below.

Purpose of Manufacturing Process Labor Cost Reports

Manufacturing companies use Labor Cost Reports to easily get both an employee and a plant level view of utilization and labor costs per process. When used as part of good business practices in a Financial Planning & Analysis (FP&A) department, a company can improve its labor and process analysis, as well as, reduce the chances that managers don’t easily see the employee expense component of a manufacturing process.

Manufacturing Process Labor Cost Report Example

Here is an example of a Direct Labor Cost by Manufacturing Process report.

Direct Labor Cost by Manufacturing Process Example

Direct Labor Cost by Manufacturing Process Example

You can find hundreds of additional examples here.

Who Uses This Type of Report?

The typical users of this type of report are: CFOs, plant and production managers.

Other Reports Often Used in Conjunction with Manufacturing Process Labor Cost Reports

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Manufacturing Process Labor Cost Reports, along with production dashboards, profit & loss reports and other management and control tools.

Where Does the Data for Analysis Originate From?

The Actual (historical transactions) data typically comes from enterprise resource planning (ERP) systems like: Microsoft Dynamics 365 (D365) Finance, Microsoft Dynamics 365 Business Central (D365 BC), Microsoft Dynamics AX, Microsoft Dynamics NAV, Microsoft Dynamics GP, Microsoft Dynamics SL, Sage Intacct, Sage 100, Sage 300, Sage 500, Sage X3, SAP Business One, SAP ByDesign, Acumatica, Netsuite and others.

In analyses where budgets or forecasts are used, the planning data most often originates from in-house Excel spreadsheet models or from professional corporate performance management (CPM/EPM) solutions.

What Tools are Typically used for Reporting, Planning and Dashboards?

Examples of business software used with the data and ERPs mentioned above are:

  • Native ERP report writers and query tools
  • Spreadsheets (for example Microsoft Excel)
  • Corporate Performance Management (CPM) tools (for example Solver)
  • Dashboards (for example Microsoft Power BI and Tableau)

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