Costing
Identifying, managing and controlling costs are fundamental to running a successful business.
A detailed understanding of your cost structure enables you to know your true operating cost,
the value of your inventory and to quote new business profitably. MMTC will help you deliver
greater value to your customers and greater profits to you by implementing powerful tools
like Activity-Based Quoting and Value Stream Costing.
Activity-Based Costing
Activity-Based Costing (ABC) is a method that
allows businesses to gather data about their operating costs. Costs are
assigned to specific activities—such as planning, engineering, or
manufacturing—and then the activities are associated with different products
or services. In this way, the ABC method enables a business to decide
which products, services, and resources are increasing their profitability,
and which are contributing to losses.
Activity-Based Costing will help you:
- Set the selling price
- Measure profit
- Value assets
- Manage the business
Activity-Based Quoting
Is your quoting based on black magic, overly dependent on a single person, or based
on old processes with one general overhead value? Do you win or lose too many quotes?
Both issues are signals of a possible problem! MMTC’s Activity-Based Quoting model costing
principles can provide a systemic quoting process that considers the actual cost of each
operation independently so that both simple jobs and complex jobs are won at a profitable
value.
Activity-Based Quoting will help you:
- Provide more accurate and repeatable quotes
- Provide faster quotes
- Improve quoting for new business
- Determine true value of inventory
- Calculate the hidden costs of inventory, rework and downtime
Value Stream Costing
Value Stream Mapping is an excellent LEAN tool used to analyze flow,
identify bottle-necks and target improvement. The improvements are typically identified
in terms of lead time, process time, inventory levels, labor requirements and floorspace
consumption. Value Stream Costing includes the dimension of $$. Attributing actual costs
to each of these operational steps is the role of Value Stream Costing. MMTC’s Value Stream
Costing is an effective tool to document not only the operational aspects of a process,
but also the financial realities.
Value Stream Costing will help management:
- Make better decisions
- Understand where your process costs lie
- Identify waste
- Identify profit deterioration
|