Designing Strategic Cost Systems: How to Unleash the Power by Lianabel Oliver

By Lianabel Oliver

Delivering a multidisciplinary roadmap for the layout, improvement, and implementation of a strategic rate procedure, this publication indicates easy methods to layout a price approach to develop into a better decision-making software and a resource of aggressive virtue for the association. It describes find out how to constitution a price structures layout undertaking and talk about the problems that are supposed to be addressed in advance from a administration, operations, and costing point of view.

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Additional info for Designing Strategic Cost Systems: How to Unleash the Power of Cost Information

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This factor sets boundaries on the system applications. Will the team be given the flexibility to explore a change in its system applications to improve the access and availability of information, or is the team limited to the constraints imposed by the current systems environment? Will stand-alone databases be allowed, or should all required information be entered into the main systems applications? Although a cost system should not be driven by the current systems applications, system limitations can add to the complexity of the implementation or require certain trade-offs in the design process.

The number and diversity of items will affect the data gathering and analysis process as well as implementation timetable. • System applications. This factor sets boundaries on the system applications. Will the team be given the flexibility to explore a change in its system applications to improve the access and availability of information, or is the team limited to the constraints imposed by the current systems environment? Will stand-alone databases be allowed, or should all required information be entered into the main systems applications?

Many organizations have performance indicators on yields, occupancy rates, capacity utilization, labor efficiency, customer service levels, and defects per million, but their cost system does not quantify how a change in these measures affects the financial results. As a result, it is often difficult for operations managers to see the link between their actions and the financial performance of the organization. A strategic cost system should have the capability to quantify the financial impact of nonfinancial performance indicators.

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