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Activity
Based Process Model
SBM's
Activity Based Process Model is uncomplicated but extremely
advanced. It delivers a whole new approach to cost modeling. By
enabling you to make a clear distinction between 'consumption' and
the 'assignment' of costs, it ensures that your product costs only
include the cost of the
activities and resources that they actually consume.
With
SBM's Activity Based Process Model you can:
Its
a Real World
and
no
one has perfect cost models, perfect data or unlimited resources. A
highly technical Industrial Engineering model that can be empirically
validated will deliver accurate costs and from this accurate
profitability analyses. At
the other end of the spectrum, a simple Bill of Materials or Recipe
that has been imported from other company systems, when combined with
accurate consumption and machine occupancy times will quickly deliver
accurate costs and a revenue and margin calculation that enables you
to rank your products and customers in relation to the rate at
which they deliver revenue, profit and return on assets.
Generate
the most accurate product costs to date
by defining precisely how activities and resources are used at each
stage of the production process
Conventional
Activity
Based Costing
and traditional
cost accounting
systems allocate or assign GL costs to products in ratios or
proportions. With SBM's Activity Based Process Model you are able to
define precisely how activities and resources are used in units of
time and quantity. By then applying unit prices to these times and
quantities to calculate the cost, your product costs are more
accurate, the maintenance of your cost models becomes a simple task
and forecasting the impact of changes to prices and the way in which
activities and resources are used becomes a straightforward 'What If' analysis.
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Model
the whole of the manufacturing process route
and see at the touch of a button each product and its accumulated
costs as it progresses from primary materials through to packaged
finished product and final delivery to the customer.
SBM's
multi-dimensional cost model enables you to create a logical process
diagram of the quantitative relationships that exist as resources, activities
and materials are consumed by products as they progress through the
manufacturing, sale and distribution processes.
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Use
rules, data tables and equations
to rapidly model even the most complex products
and manufacturing processes.
Driven
by a powerful and extremely fast costing engine
SBM uses
equations, rules and data tables to translate simple inputs into
sophisticated cost models that accurately assign costs and deliver
validated results within minutes.
The
level of accuracy you use to define consumption and time depends
entirely on the needs and sensitivites of your business, but if you
need more than 'average' or 'approximate' times SBM's
Activity Based Process Model makes
it easy by providing a wide range of predefined
industry specific rules and dependency calculations
as well as data
table, equation
and easy to use formula building functions
that enable
you to define your own arithmetic and data relationships.
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Maintain
a fully costed Bill of Materials
and import and export BOM data to other company systems.
SBM's
Activity Based Process Model includes sophisticated Bill of Material
and Recipe Management capabilities that enable you to define not only
the resources, activities and materials your products consume but
also the by-products, waste and different quality choices produced,
material and process yields, machine set-up times, operating
times and down times. For finished products, packaging and labelling,
storage and despatch data and transport costs can all be included to
provide a comprehensive statement of how a product is manufactured
and its end-to-end supply chain costs derived.
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Define
product and cost analysis structures
that are
in line with
your company's reporting and analytical accounting needs
Because
there are no pre-defined formats to your product structures or
limits to the number of stages in the manufacturing, sale and
distribution process, your cost models can be as simple or complex as
you wish.
You
can define product hierarchies and genealogies, attributes such as
grade, group and brand, your cost analysis categories and analytical
accounting structure.
You
can link together different activities to form processes and include
one product or cost object in another in a conventional work in
progress structure. When you model the different stages of production
separately, costs are generated for each stage of the process and
automatically inherited, so for multi-site operations you have full
visibility of the costs of intermediate as well as finished products
and the mechanism with which to handle transfer pricing and the
elimination of inter company margin.
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