Tag Archives: Process Manufacturing

Is Activity-Based Costing Worth It?

Manufacturing companies need to understand product costs accurately and in detail. This kind of information is essential for planning operations, pricing, and evaluating business margins. Activity-based costing helps manufacturers identify what products are truly profitable, the true costs of products for pricing, and what activities are driving costs. However, activity-based costing is known for being […]

New Solutions Are Necessary For Success In Chemical Manufacturing

The chemical industry is characterized by process-based manufacturing, high capital intensity, and long investment cycles. Over the longer term, capital is deployed for R&D or capacity expansion, while, over the shorter term, resources are targeted to increase productivity and reduce costs. This process has kept the industry stable because their conservative response to change was […]

Haven’t Joined the Industry 4.0 Transformation? It’s Not Too Late

We’re in the midst of a significant transformation regarding the way we produce products thanks to the digitization of manufacturing. This transition is so compelling that it is being called “Industry 4.0” to represent the fourth revolution that has occurred in manufacturing. Finance professionals know that new technologies will fulfill the promise of artificial intelligence, data […]

8 Essential Manufacturing Metrics Infographic

The sheer number of metrics to consider in manufacturing can be daunting. Knowing which matter most and how to apply them to your business is of paramount importance. In the article “28 Manufacturing Metrics that Actually Matter,” Mark Davidson identifies several of these metrics. We’ve picked the 8 most pertinent metrics for manufacturers and outlined […]

8 Essential Manufacturing Metrics

The sheer number of metrics to consider in manufacturing can be daunting. Knowing which matter most and how to apply them to your business is of paramount importance. In the article “28 Manufacturing Metrics that Actually Matter,” Mark Davidson identifies several of these metrics. We’ve picked the 8 most pertinent metrics and outlined what they […]

Four Steps to Calculating Process Costs

Process costing focuses on the direct and allocated costs associated with the operation of a given area of the manufacturing flow.  Maybe it’s a work center, a cost center, or a specific production line, but what it really represents is an area where you want to determine the unique cost added to the product as […]

The Five W’s (and one H) of Designing Cost Systems

There comes a point in every process manufacturing organization when you know that you need a robust cost accounting system.  Whether you choose to build a system from scratch, or purchase and configure a system, there are six questions you should ask (and answer) before you embark on the project. WHO benefits from the cost […]

Top Eight Warning Signs You Have a Dysfunctional Costing System – Part 2

The book Designing Strategic Cost Systems: How to Unleash the Power of Cost Information by Lianbel Oliver has a great list of warning signs that may indicate that your company’s costing system is dysfunctional.  Make sure you check out Part 1 of this blog where I covered the first four signs.  And without further ado, here’s […]

What does it cost us to produce this product?

Sound familiar?  This question is asked countless times by a variety of people inside a business – operations accounting, plant accounting, sales and marketing, and even research and development.  In most cases the answer is given as one general cost number derived from a universal standard rate and unit of measure within the business.  My clients with […]