Activity Based Management

Activity-Based Management

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Activity-based costing establishes relationshipsbetween overhead costs and activities so that

we can better allocate overhead costs.Activity-based management focuses

on managing activities to reduce costs.

ABM PROFILE

ABM = COST DIMENSIONAL + PROCESS DIMENSIONABC + PVAAccurate Cost + Reduce CostAssignment

Customer Satisfaction + Profit

Two-Dimensions of Activity-Based Management

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Cost Objects

Activities

Driver Analysis

Process ViewActivity Analysis

Resource costs

Cost Assignment View

PerformanceMeasures

Activity Evaluation

REDUCE COST AND IMPROVE PROFIT

Elimination of Non-Value-Added Costs

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Nonvalue-added activities

NecessaryUnnecessary

Activities

Reduce orEliminate

Continually Evaluate and Improve

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Implementing ABM

(continued on next slide)

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Implementing ABM

(continued from previous slide)

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Systems planningSystems planning provides the justification for implementing ABM and address the following issues:

1. The purpose and objectives of the ABM system.2. The organization’s current and desired competitive position.3. The organization’s business processes and product mix.4. The timeline, assigned responsibilities, and resources

required for implementation.5. The ability of the organization to implement, learn, and use

new information.

Identifikasi, definisi, dan klasifikasi aktivitas

DefinisiDigunakan 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.

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).

ABM NEEDS RESPONSIBILITY ACCOUNTING

4 ELEMENTS OF RA:1. Assigning responsibility2. Establishing performance criteria3. Evaluating performance4. Assigning rewards

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)

1. Assigning responsibility

2. Establishing performance criteria

3. Evaluating performance

4. Assigning Rewards

Process Value Analysis (PVA)

Process dimension -> reduction costElements of PVA:1. Driver analysis (what causes activities cost)

Act input (resources consumed)Act output (product resulted)

2. Activity analysis (determining VA + NVA activities to reduce cost)elimination, selection, reduction, uniting activities

3. Activity performance measurement

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Process Value Analysisconstant 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

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• Assessing activity performance– Financial measures–Nonfinancial measures

• Dimensions of performance assessment– Efficiency (Output : Input)–Quality (durability, function, etc.)–Time (speedier means less resources

consumption)

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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

1. Value- and nonvalue-added activity costs

Contoh Aktivitas di RTP Inc.Aktivitas penggerak aktivitas SQ AQ SP

Pengelasan jam pengelasan 10.000 12.000 $40

Pengerjaan ulang Jam pengerjaan ulang 0 10.000 9

Penyetelan Jam penyetelan 0 6.000 60

Pengawasan Jumlah pengawasan 0 4.000 15

Aktivitas Biaya bernilai tambah(SQ * SP)

Biaya tak bernilai tambah (Karena tidak

sempurna)

Biaya aktual(AQ * SP)

Pengelasan $400.000 $80.000 $480.000

Pengerjaan ulang

0 90.000 90.000

Penyetelan 0 360.000 360.000

Pengawasan 0 60.000 60.000

Total $400.000 $590.000 $990.000

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

2. Trend ActivityAktivitas 2007 2008 perubahan

Pengelasan $80.000 $50.000 $30.000

Pengerjaan ulang

90.000 70.000 20.000

Penyetelan 360.000 200.000 160.000

Pengawasan 60.000 35.000 25.000

Total $590.000 $355.000 $235.000

Pelaporan tren : biaya tak bernilai tambah

3. Kaizen Standard

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

ACTIVITY BASED CUSTOMER

ACTIVITY BASED SUPPLIER Murray, Inc Plata Associates

KomponenA1

KomponenB2

KomponenA1

KomponenB2

biaya pembelian

$20x80.000 $1,600,000 $52x40.000 $2,080,000 $24x10.000 240,000 $56x10.000 560,000

Perbaikan produk

$400x1600 640,000 $400x380 152,000 $400x10 4,000 $400x10 4,000

Percepatan pengiriman produk

$2000x60 120,000 $2000x40 80,000

Biaya total $2,360,000 $2,312,000 $244,000 $564,000

unit 80,000 40,000 10,000 10,000Biaya total unit $29.50 $57.80 $24,40 $56,40

THE END