Managing cycle time
Article Abstract:
The manufacturing cycle time is the period between a product's design and its delivery to the customer. By shortening the cycle time, manufacturers can boost their profitability through increased production without added capacity and through timely product delivery. However, cycle-time reduction may only be possible with substantial investment in new technology and a restructuring of operating procedures, methods and policies, as well as of supplier customer relationships. Any cycle-time reduction proposal should include a cost-benefit analysis that examines the impact of the program on throughput, identifies that activities that are time-consuming and those that can be modified without affecting throughput, estimates the cost of redefining the activities, and assesses the cost savings from shorter cycle time for given activities.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1995
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Steeling time with ABC or TOC
Article Abstract:
Southwestern Ohio Steel (SOS) adopted a pricing model that combines the principles of activity-based costing and the theory of constraints to reduce manufacturing cycle time and improve the gross margins on its steel sheet products. The Hamilton, OH-based steel service center applied the methodology to the blanking or cutting line, the most important component of the plant's operations and also its leading operating constraint. The firm's aim was to reduce the nonvalue-added cycle time, the time spent on activities other than processing, in its blanking line operations. The saved blanking-line hours could then be used to process additional new orders. The methodology helped SOS move from small cost-inefficient orders toward bigger orders with higher margins.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1995
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Pricing strategy in the automotive glass industry
Article Abstract:
A proper price setting strategy in the automotive glass industry can help to improve the connection between production and marketing and increase profitability. Coordinating marketing and production allows companies to sell a mix of product orders which maximizes efficiency and reduces production, distribution, and customer demand bottlenecks. Industry accountants can provide more accurate cost information by concentrating on production department overhead, material movement overhead, and general plant overhead. Throughput values used in developing a product mix strategy are determined for individual products in a mix by subtracting costs directly traceable to the product from the product's net revenue.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1989
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