Activity based management and today s advanced manufacturing environment
Download
1 / 25

Activity-Based Management and Today s Advanced Manufacturing Environment - PowerPoint PPT Presentation


  • 151 Views
  • Uploaded on

6. Chapter Six. Activity-Based Management and Today’s Advanced Manufacturing Environment . Just-in-Time Inventory and Production Management. No materials are purchased and no products are manufactured until they are needed. The primary goal of a JIT production system is

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Activity-Based Management and Today s Advanced Manufacturing Environment' - reid


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Activity based management and today s advanced manufacturing environment l.jpg

6

Chapter Six

Activity-Based Management and Today’s Advanced Manufacturing Environment


Just in time inventory and production management l.jpg
Just-in-Time Inventory and Production Management

No materials are purchased and no products are manufactured until they are needed.

The primary goal of a

JIT production system is

to reduce or eliminate

inventories at every

stage of production.


Key features of the jit approach l.jpg
Key Features of the JIT Approach

Smooth, uniform production rate

Pull method of production

Purchase is small lot sizes

Quick, inexpensive setups

High quality of materials

Effective preventive maintenance

Teamwork

Multiskilled workers


Jit purchasing l.jpg
JIT Purchasing

Long-term

contracts with

suppliers.

Only a few

suppliers.

Grouped

payments to

vendor.

Minimal

inspection of

materials.

Parts delivered

in small lots.


Flexible manufacturing system l.jpg

Computer-

numerically-

controlled

machines.

Computer-aided

design system.

Automated

material-handling

system.

Computer-aided

manufacturing

system.

Automated

material-handling

system.

Computed-

integrated

manufacturing

system.

Flexible Manufacturing System

An integrated system of computer-controlled machines

and automated material-handling equipment, which

is capable of producing a variety of technologically

similar products.


Activity based management l.jpg

The use ofactivity analysisto helpmanagementmake decisions

Activity-Based Management


Activity based management7 l.jpg
Activity-Based Management

Activity-based costingestablishes relationshipsbetween overhead costs and activities so thatwe can better allocate overhead costs.

Activity-based managementfocuses on managing activities to reduce costs.


Two dimensional abc and activity based management l.jpg

Cost Assignment View

Resource costs

Process View

Activity Analysis

Activity Evaluation

Performance

Measures

Root

Causes

Activity

Triggers

Activities

Cost Objects

Two-Dimensional ABC and Activity-Based Management


Two dimensional abc and activity based management9 l.jpg

Assign resource

costs to activity

cost pools.

Resource costs

Performance

Measures

Root

Causes

Activity

Triggers

Activities

Assign activity

costs to cost

objects using

cost drivers.

Cost Objects

Two-Dimensional ABC and Activity-Based Management

Cost Assignment View


Elimination of non value added costs l.jpg
Elimination of Non-Value-Added Costs

Activities

Analysis andClassification

Nonvalue-addedActivities

Value-addedActivities

Reduce orEliminate

Continually Evaluate and Improve


Using abm to eliminate non value added activities and costs l.jpg
Using ABM to Eliminate Non-Value-Added Activities and Costs

  • Identify Activities.

  • Identify Non-Value-Added Activities.

  • Understand Activity Linkages, Root Causes, and Triggers.

  • Establish Performance Measures.

  • Report Non-Value-Added Costs.

Specify

parts

Select

vendor

Receive

parts

Produce

goods

Inspect

finished

goods

Rework

defective

products


Customer profitability analysis l.jpg
Customer Profitability Analysis

Customer profitability analysis uses

activity-based costing to determine

the activities, costs, and profit associated with serving particular customers.


Customer profitability analysis13 l.jpg
Customer Profitability Analysis

Requiredspecialpackaging.

Orderssmallquantities.

Demandfastservice.

Oftenchangesorders.

Ordersfrequently.

A costly customer


Customer profitability analysis14 l.jpg
Customer Profitability Analysis

A company may used theses customerrelated costs to help determine theprofitability of each customer.


Customer profitability analysis15 l.jpg
Customer Profitability Analysis

75% of actual operating income

50% of actual operating income

25% of actual operating income


Achieving cost reduction l.jpg
Achieving Cost Reduction

Activity

Reduction

Activity

Selection

Reduce

Non-Value-Added

Costs

Activity

Sharing

Activity

Elimination


Target costing l.jpg
Target Costing

Design a product, and the manufacturing process, so that the product can be manufactured at a cost that will enable the firm to make a profit when the product is sold at an estimated market-driven price.

Target

Price

Target

Cost

Target

Profit


Kaizen costing l.jpg
Kaizen Costing

The process of cost reduction during the manufacturing phase of an existing product.

Product cost

.

Current year

cost base.

.

Cost base for

next year.

3/31/0x

3/31/0x


Kaizen costing19 l.jpg
Kaizen Costing

The process of cost reduction during the manufacturing phase of an existing product.

Product cost

.

Kaizen goal

cost-reduction

amount.

}

.

3/31/0x

3/31/0x


Benchmarking l.jpg
Benchmarking

The continual search for the most effective method of accomplishing a task, by comparing existing methods and performance levels with those of other organizations.

Here are

the best

practices

in our

industry. . .


Re engineering l.jpg
Re-engineering

The complete redesign of a process, with an emphasis on finding creative new ways to accomplish an objective.


Theory of constraints l.jpg
Theory of Constraints

A management approach seeking to maximize long-run profit through proper management of organizational bottlenecks or constrained resources.


Keys to successfully implementing abc and abm l.jpg
Keys to Successfully Implementing ABC and ABM

1. Organizational Culture.

2. Top-Management Commitment.

3. Change Champion.

4. Change Process.

5. Continuing Education.


Other cost management issues in the new manufacturing environment l.jpg
Other Cost Management Issues in the New Manufacturing Environment

Product

Life-Cycle

Costs

Justifying

Investments in

Advanced

Manufacturing

Systems

Performance

Measurement


End of chapter 6 l.jpg
End of Chapter 6 Environment

Now this is anactivity that Ican manage!


ad