Strategies for implementing activity-based costing in the UK manufacturing industry

The purpose of this paper is to report the findings with a case study on why activity based costing lacks impact in the UK manufacturing industry. Activity based costing was performed on selected MT range subsystems of an electrical power generator to compare with the current UNN UK’s conven-tional costing system. The results have found that the current costing system works well for the MT products and thus change of costing system is not necessary for these products. The activity based costing system can be partially implemented in UNN UK for areas requiring detailed costing infor-mation such as new renewable products. Based on the result of the case study, this paper also high-lights the strategies need to be considered in order to adopt activity based costing within a typical manufacturing environment

A Review of the Implementation of JIT Algorithms and Models in Production Systems

Intense competition in today’s economy, the shrinking life cycles of products, and the heightening expectations of customers have forced business enterprises to focus their attention on correctly arranging and controlling their production and supply chain systems. Thus, manufacturing firms/industries adopt JIT techniques to enjoy competitive advantage. In this paper, a literature review is presented to show the important applications of JIT Algorithms and Models in Production Systems. The purpose of this step is to review the results obtained from the implementation and to provide the practical recommendations for further improvement. This will help reveal practical issues encountered in the implementation. All these issues should become main concerns if the manufacturing Plant wants to get maximum benefits from the JIT implementation. This study bridged a research gap by identifying a framework for re-design of manufacturing systems into practical optimum Just-In-Time systems. The conventional JIT approach is mostly applicable to static production systems and the dynamic production systems require a more practical integrated JIT approach

Cost-conscious manufacturing – Models and methods for analyzing present and future performance from a cost perspective

Manufacturing is an industry in which the effects of globalization are obvious. Manufacturing costs are a key factor in this respect and affect, for example, decisions about offshoring, i.e., moving production abroad. If Sweden and other Western countries are to maintain large manufacturing sectors, they must be competitive, making cost one of the most critical parameters. The work presented here seeks to develop tools for cost-conscious manufacturing. These tools should provide insight into how well a manufacturing system is performing and support the analysis and prioritization of manufacturing development activities. To achieve this objective, two research questions were formulated. The first research question (RQ1) concerns how a general cost model should be designed to take into consideration the most important process-near parameters influencing manufacturing system performance. A cost model developed in accordance with this research question includes critical parameters affecting performance, such as cycle time, setup time, and performance loss parameters. The model is centered on the processing steps involved in processing a part. The losses occurring in the processing steps are important in the model, so the links between structured, detailed monitoring of the loss causes and their impacts on costs are emphasized. Modified versions of the model to analyze volume flexibility and downtime variability are also presented. The second research question (RQ2) concerns how such a cost model can be used in practice, i.e., the requirements and conditions for industrial use. Implementation in an automotive company indicated that the model was applicable in this context and that interesting insights into manufacturing costs could be gained from using the model. A study of the industrial conditions for applying the cost model identified software products for collecting manufacturing loss data that support the level of detail needed for model input, but found that manufacturing companies do not necessarily collect such detailed data. A demonstration program developed based on the databases available in a collaborating company indicated how the cost model could be used practically in a company. The somewhat deficient detail in the collected loss data, found in the above study, led to an inquiry in another company into the pros and cons of collecting highly detailed performance loss data. The results identified more advantages than disadvantages with collecting more detailed data: the operators responsible for data collection did not perceive any particular difficulties with the increased detail and the production manager believed that the increased detail led to better knowledge of performance losses

Benefits of Implementing Automated Costing in a Small Machine Shop: A Case Study

Knowledge based cost estimating systems are available, but is there a lower limit to their applicability in an industrial environment?  This paper answers this question by examining a knowledge based cost estimating expert system application in a small machine shop.  Differences between the traditional experienced-based system currently employed and the automated system are studied.  Data is gathered to analyze time effectiveness, accuracy, and payback of the software.  Data from seventy part models is recorded to study the time experiment and data from fifty part models is used to study accuracy and consistency.The results indicate that the software is faster than traditional quoting systems; however, the payback point is high. Also, results show that the software has a smaller average time to manufacture percent difference between the automated system and the actual time to manufacture (TTM) compared to the percentage difference between the traditional TTM and actual TTM. Standard deviation for the automation is also less, implying better consistency.  As a result, the attractiveness of the automated system in the limiting case of a small machine shop rests with significantly improved accuracy and consistency rather than payback.