Activity-based management

Activity-based management has already proven extremely valuable to manufacturers in helping them to cut waste, improve quality, reduce cycle times, and get their products to market faster. The team that had the first bestselling title on activity-based costing, now looks at activity-based management. Now, Activity-Based Management demonstrates how this innovative form of managerial accounting - which provides an organization with the tools to isolate the separate activities within its business processes and measure the cost and performance of each activity - can be applied to service groups, government agencies, and nonprofit entities. This new management technique will enable organizations to pinpoint problem areas, achieve excellence, and set in motion a process of continuous improvement. This groundbreaking book examines why traditional managerial accounting methods have become obsolete in a new age of advanced technology and information systems. It discusses why they can only treat the symptoms rather than the root causes of problems and why they are incapable of measuring and making visible the actual costs of providing a service - a key to eliminating wasteful activities. Activity-Based Management argues that activities - the basic components of an organization and the building blocks for analyzing costs - must be the backbone of any contemporary managerial system. It reveals how activity management highlights those resources that drive costs, focuses corporate strategy, supports continuous improvement, enhances decision support systems, and ensures that plans are transmitted to a level at which effective remedial actions can be taken. The book introduces a five-step approach to calculating activity cost. It identifies the way on organization uses its resources to accomplish its objectives by eventually pinpointing the actual cost per activity. Armed with this information, readers are ready for the next stage - activity-based budgeting. Here, the book lays out a step-by-step process that helps organizations plan and control their expected activities/business processes in order to derive a cost-effective budget that will meet projected workloads and strategic goals. Readers discover the many advantages of activity-based budgeting over the traditional techniques, including its ability to empower workers, improve business processes on an ongoing basis, and support excellence. The final chapter of Activity-Based Management showcases the value of activity management and budgeting in a number of settings, including insurance, banking, government agencies, hospitals, and a variety of other service organizations. In case after case, readers learn how ABM is already helping organizations to minimize costs, improve quality, and meet their strategic objectives. A vital new tool for modern times, Activity-Based Management is essential reading for CEOs, vice presidents, operations executives, controllers, anyone who budgets, and managers in service organizations, as well as support functions in manufacturing companies.