ABM at Dayton Technologies: from obstacles to opportunities
Article Abstract:
Management at Dayton Technologies replaced its single-driver, conventional overhead costing system with an activity-based costing (ABC) system because the latter can better manage the company's high levels of product and volume diversity. Assisted by prominent ABC consultant Peter Turney, the company started implementing the ABC system in 1989 with the full support of senior management, a crucial component of a successful ABC implementation program. Initially, the company, formerly known as Dayton Extruded Plastics, designed a highly complex and cumbersome model but eventually simplified the system by reducing the number of drivers from more than 40 to just 11. It involves the definition and collection of driver information, gathering of valid and unbiased responses from managers and employees, and collection of timely response. The initiative was so successful that the company is now planning to introduce activity-based management as a conjunct to ABC.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1996
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Measuring the costs of quality
Article Abstract:
Application of quality cost concepts to a small plastic firm shows that cheaper is not necessarily better if the cost of quality is considered. The two concepts at issue here are the price of nonconformance and the price of conformance. The former considers all costs that accrue as a result of improper practices while the latter measures costs required in introducing and maintaining a system for removing deficiencies. In the study, the cost of quality of a particular raw material, known as RM #033, was measured using a cost-benefit analysis approach. Results show that the cost of quality of this material was exorbitant, which justifies termination of its use and identification of alternative materials. Conclusion of the study called for the use of prime nylon instead of RM #033. It was found to be higher in price but the hidden costs linked to the poor-quality RM #033 justified substitution.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1995
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Stolle puts world class into memory
Article Abstract:
The Stolle Corp's Memory Products Division adopted the world-class manufacturing (WCM) concept in 1988 to achieve its goal of producing high quality products at lower costs. To ensure the success of its WCM program, the Sidney, OH-based company sought the support of the division's workforce. A steering committee was then established to manage program implementation. The committee decided to apply WCM to the division's polish center and created a project team whose members were trained in personal leadership, interpersonal effectiveness and team work. This team focused on 'throughput time,' 'work-in-process' and 'percentage of handling damage.' Eight weeks of WCM implementation at the polish center have resulted in drastic reductions in nickel load throughput time, load of work-in-process, setup time, end-of-production-line rejection rates, maintenance costs and frequency of downtime.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1993
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