Cost audit success stories in cement and sugar industries

Actions taken by Cement Industry on the advice of Cost Auditors

Accruing benefits to Industry Because of Cost Audit

Switch-over was made from furnace-firing to Coal firing System

• Substantial reduction of fuel Costs.
• Reduction in manufacturing costs by about 15%

High bur stage rate (Over 1%) of paper bags taken up with manufactures

• Paper bags quality was improved
• Bur stage rate reduced by more than half.

Obsolete and Slow- moving items os stores/spares tackled properly.

• Improvement in Cash flows
• Blockade of funds checked.

Comparisons made of actual production of each unit with its rated capacity, budget and previous years position.

• Variances in production were identified
• Corrective actions traken to improve production

Transmission losses in electricity checked, and captive power generation units installed.

• Cheaper electricity was produced.
• Cost of power supply was reduced.

Actions taken by Sugar Industry on the advice of Cost Auditors

Accruing benefits to Industry Because of Cost Audit

Yield Comparisons were made

-Pilferage, Wastage and process problems reduced.

- Raw material, WIP, Finished goods valuations improved.

Refineries were installed by some Sugar units to further process molasses ( earlier sold at nominal prices)

• Better and profitable utilization of molasses and bagasse
• Some sugar mills produce alcohol and chipboards.