ABC for mid-market manufacturing

Performa’s Manufacturing template is designed for medium-sized manufacturing companies (10-500 employees) with a heterogeneous product portfolio: a mix of standard high-volume products and custom low-volume products, typically served by the same machines and the same people.

The problem it solves

In classic mid-market manufacturing, indirect costs (machine setup, quality control, R&D, internal handling, maintenance) are often 30-50% of total cost. When these costs are allocated proportionally to volume — as many standard ERPs do — custom low-volume products come out “free” while standard products “pay for” everything.

The result: wrong pricing, wrong mix decisions, and the sales team bringing home custom orders that seem “very attractive” but actually destroy value.

What the template ships with

The Manufacturing template arrives pre-configured with:

Staff: employee grid with standard fields (role, salary, benefits, PPE, training), employee × activity timesheet that auto-generates allocation rules.
Building & Utilities: building with capacity in square meters, distribution to production departments via “m² occupied” driver.
Machines and workstations: capacity in machine hours, depreciation, energy. “Hours consumed” driver for the assignment to products.
Production activities: CNC, joinery, assembly, painting, testing. Each with capacity and calculated unit cost per hour.
Support activities: internal logistics, maintenance, work organization, HR. They flow onto production activities via appropriate drivers.
Overhead: sales, administration, general management. Accumulated on a “structure” cost object, not on products.
Products: final cost object with BOM (raw materials), volumes, sale price, calculated cost-to-serve.

Typical insights that emerge

From real models built on Performa in manufacturing companies:

The 20% lowest-volume products absorb 60% of machine setup — because every changeover has an almost fixed setup cost independent of batch size.
A “custom” product that looks high-margin actually burns margin once you add the design engineer’s hour, the extra quality-control cycle, the sales rep who chaperoned the order, non-standard packaging.
Production capacity is under-utilized by 70-80% — and nobody noticed, because idle cost was smeared indistinctly onto active products, inflating their cost. Performa isolates it as a separate P&L line.
A “product A” that has always been sold at 40% margin turns out, post-ABC, to be at 12%. The sales team has 30 days to renegotiate or stop selling it below cost.

The documented reference case

Mid-market joinery workshop, 23 employees, 5 product lines, €3.7M revenue.

Model: 30+ nodes, 45+ allocation rules
Resource pools: 1 building, 4 vehicles, 1 workstation pool, 20+ depreciated assets
Production activities: CNC (60k hours capacity), Joinery (100k hours), Assembly (15k person-hours)
Support activities: Internal logistics, Maintenance, Work organization, HR
Cost objects: 5 products, volumes 5,000-12,000 units/year
Cost-to-serve product A: €18.22/pc (raw materials €3, external processing €1.50, CNC €3.21, Joinery €5.82, Assembly €4.68). Sale price €35 → real margin 48%.
Key insight: CNC is saturated at 76.8%. 13,900 idle hours × €6.42/hour = €89k of idle cost, which used to be smeared onto products, inflating their cost by 4-6% asymmetrically.

Who buys it, typically

Management accounting advisors serving 3-15 mid-market manufacturing clients, in-house controllers of manufacturing groups looking to replace an Excel allocation file, production directors who want to know the true cost of custom requests before accepting them.

Want to see the Manufacturing template applied to your case? Write to us. If you’d rather start with the product: explore Performa.