. The transportation sector, as it relates to the movement of raw materials or finished goods, has a direct impact on the marketability of the product. How efficiently goods are manufactured affects product cost and product quality, not to mention service levels that suffer when shipments are late.
The first element of management organization to achieve Activity-Based Costing excellence is establishing a system(and backup systems)that have the right elements in the right place in a timely manner in order to fuel productivity. With this realization, many companies have begun to focus on increasing operational effectiveness through Activity-Based Costing management (Cadeaux, 1997, 199).
Today's Activity-Based Costing manager must first of all have the knowledge and expertise to integrate all of the company's Activity-Based Costing operations into the supply chain. This means that the Activity-Based Costing operation can't remain separate but must be thought of as an integral component of the production cycle providing the infrastructure to improve cycle time and optimize product-to-market time (O'Malley, Patterson & Evans, 1997, 190-191).
The increased importance of global marketing strategies coupled with new methods of manufacturing management has led to a renewed emphasis on the management of Activity-Based Costing processes. Activity-Based Costing processes are those used to manage the movement and storage of goods among the different members of the supply chain and across international borders. The management of ABC processes plays a vital role in the success of manufacturing and marketing strategies in following five areas of management challenge:
1. Successful Activity-Based Costing managers must learn to create new attitudes of information management and must take an active role in helping companies plan their long-range goals.
2. The Activity-Based Costing manager must begin to think in long-term ...