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A ctivity Based Management

A ctivity Based Management. Activity-Based Management. Activity-based costing establishes relationships between overhead costs and activities so that we can better allocate overhead costs. Activity-based management focuses on managing activities to reduce costs. ABM PROFILE.

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A ctivity Based Management

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  1. Activity Based Management

  2. 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.

  3. ABM PROFILE ABM = COST DIMENSIONAL + PROCESS DIMENSION ABC + PVA Accurate Cost + Reduce Cost Assignment Customer Satisfaction + Profit

  4. Cost Assignment View Resource costs Process View Activity Analysis Activity Evaluation Driver Analysis Performance Measures Activities Cost Objects Two-Dimensions of Activity-Based Management REDUCE COST AND IMPROVE PROFIT

  5. Elimination of Non-Value-Added Costs Activities Nonvalue-added activities Unnecessary Necessary Reduce orEliminate Continually Evaluate and Improve

  6. Implementing ABM 4. (continued on next slide)

  7. Implementing ABM 4. (continued from previous slide)

  8. Systems planning 4. Systems planningprovides the justification for implementing ABM and address the following issues: • The purpose and objectives of the ABM system. • The organization’s current and desired competitive position. • The organization’s business processes and product mix. • The timeline, assigned responsibilities, and resources required for implementation. • The ability of the organization to implement, learn, and use new information.

  9. Identifikasi, definisi, dan klasifikasi aktivitas • Definisi Digunakan untuk mengetahui pekerjaan apa saja yang membentuk suatu aktivitas untuk meningkatkan efisiensi aktivitas yang bernilai tambah. • Klasifikasi Digunakan untuk menghubungkan ABM dengan berbagai usaha perbaikan berkelanjutan. • Identifikasi Digunakan manajemen perusahaan untuk memusatkan perhatian pada berbagai aktivitas yang tidak bernilai tambah.

  10. Failure of ABM implementation • Kurangnya dukungan manajemen tingkat atas (Lack of support ). • Manajer operasional dan penjualan tidak ahli menggunakan informasi aktivitas yang baru (incapability of operational managers). • Kurangnya kegiatan pelatihan dan pendidikan tentang penggunaan informasi ABM (lack of training). • Para manajer menerima informasi baru dengan sikap skeptis (sceptical attitude) . • Para manajer cenderung menggunakan angka akuntansi tradisional bersama dengan data baru tersebut (tend to use traditional system in the lieu of new system).

  11. ABM NEEDS RESPONSIBILITY ACCOUNTING 4 ELEMENTS OF RA: • Assigning responsibility • Establishing performance criteria • Evaluating performance • Assigning rewards

  12. Types of RA • Financial Based Low competition, standardized product/activities, mass production, low IT adoption • Activities Based High competition, unstandardized product/activities, order production / mass customization, high IT adoption • Strategy Based (Chapter 16)

  13. 1. Assigning responsibility

  14. 2. Establishing performance criteria

  15. 3. Evaluating performance

  16. 4. Assigning Rewards

  17. Process Value Analysis (PVA) Process dimension -> reduction cost Elements of PVA: • Driver analysis (what causes activities cost) Act input (resources consumed) Act output (product resulted) • Activity analysis (determining VA + NVA activities to reduce cost) elimination, selection, reduction, uniting activities 3. Activity performance measurement

  18. Process Value Analysis constant improvement, including cost reduction through activity management • Activity elimination • Focus on eliminating nonvalue-added activities • Activity selection • Choose among sets of competing strategies • Activity reduction • Decrease time and resources required by an activity • Activity sharing / uniting activities • Use economies of scale to increase efficiency

  19. Assessing activity performance • Financial measures • Nonfinancial measures • Dimensions of performance assessment • Efficiency (Output : Input) • Quality (durability, function, etc.) • Time (speedier means less resources consumption)

  20. Financial Measures of Activity Efficiency • Reveal the current level of efficiency and the potential for increased efficiency • Value- and nonvalue-added activity costs • Trends in activity costs • Kaizen standard setting • Benchmarking • Activity flexible budgeting • Activity capacity management

  21. 1. Value- and nonvalue-added activity costs

  22. Contoh Aktivitas di RTP Inc.

  23. Laporan biaya bernilai tambah dan tak bernilai tambah untuk tahun fiskal yang berakhir pada 31 desember 2008

  24. 2. Trend Activity Pelaporan tren : biaya tak bernilai tambah

  25. 3.KaizenStandard

  26. Benchmarking • Uses best practices as the standard for evaluating activity performance • Internal benchmarking • Benchmarking against the best internal performance • External benchmarking • Comparison with others outside the organization

  27. ACTIVITY BASED CUSTOMER

  28. ACTIVITY BASED SUPPLIER

  29. THE END

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