What is a Labor Forecast for a Manufacturing Plant?

Labor forecasts are considered employee expense models and are often used by plant managers and budget analysts to estimate detailed labor expenses for the remaining periods of the year. Some of the key functionality in this type of planning template is that it displays year-to-date salary expenses by employee and provides input for the remaining months of the year. Expected new employees can be added at the bottom of the form. The top portion contains charts that give an easy visual analysis of the resulting labor expense forecast. You find an example of this type of planning template below.

Purpose of Labor Forecasts

Manufacturing companies use Labor Forecasts to get a detailed estimate of expected employee expenses per plant for the year. When used as part of good business practices in a Financial Planning & Analysis (FP&A) department, a company can improve its workforce planning and profit estimates as well as reduce the chances that managers lack insight into labor expenses and related plant results.

Labor Forecast Example

Here is an example of a Labor Forecast for a manufacturing plant.

Labor Forecast for a Manufacturing Plant Example

Labor Forecast for a Manufacturing Plant Example

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Who Uses This Type of Planning template?

The typical users of this type of planning template are: CFOs, plant managers, budget managers.

Other Planning templates Often Used in Conjunction with Labor Forecasts

Progressive Financial Planning & Analysis (FP&A) Departments sometimes use several different Labor Forecasts, along with revenue forms, capex, other operating expense forms 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)

Corporate Performance Management (CPM) Cloud Solutions and More Examples