The operational, competitive and profitable benefits you may expect when implementing a Product Cost Compass.
Everything that happens in a business, both the existing and as a consequence of change, have to be related to its benifits linked to competiveness and profitability. Important parameters to measure existing activities and change of business are productivity, precision*, speed* and agility*. These parameters are closely connected to competiveness and profitability.
Examples of benefits:
- In practice, our models are a reinforcement of existing GAAP, not a replacement of its common standards. The reinforcement includes a clear link between resource consumption (both hard and soft) in order to contribute to the value increase in products or services
- Reinforcement of the Activity Bases Costing (ABC) model. However, attention should be paid to the fact that our models' focus is the product
or service, because here's where activity and its resource consumption are constantly
being performed, tested and questioned to improve productivity and thus
- Complete what's lacking in the concept of Lean Accounting to support Lean efforts linked to both The Work Cell ,
ValueChain and System
- Reestablish Human Power as one of the most important assets. As described in the book The Hidden Treasure chest (Bergstrand, 1993), models were presented to ensure and further develop employee skills, and provide employees with the opportunity to contribute to the development of the business
- Enables the potential of accelerating IT revolution, such as apps, internet, cloud, digitization, robotization, Big Data, Block Chains, IT security etc
*) Precision means the ability to deliver the Right Product, to the Right Customer, in the Right Time, at the Right Price and Quality. Speed means how fast the business can respond to a specific customer demand. Agility entails the inherent flexibility of products and processes to effectively handle various business situations.