All posts by John Miller

Cost Management

Cost Management – Reference Material

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Activity-Based Management I. Benchmarking Consortium Study. 1996

John A. Miller (Subject Matter Expert)

Published in 1996, this 72 page Best Practice Study was conducted by the American Productivity and Quality Center (APQC). Over 50 companies sponsored the study. 16 Best Practice Partners were identified including Deere & Company, Boeing, General Motors (Delco Electronics), PCS Health Systems Inc, IBM (Endicott Panel), and First Tennessee Bank.

Activity-Based Management I. Benchmarking Consortium Study. 1996

Activity-Based Management II. Best Practices for Dramatic Improvement

John A. Miller (Subject Matter Expert)

Published in 1997, this 116 page Best Practice Study, again published by the APQC, was titled Best Practices for Dramatic Improvement and was sponsored by 25 companies including Case Corporation, Coca-Cola Goods, MetLife, Navistar, Allied Signal, Controller Magazine, and Nationwide Insurance. Best Practice Partners included Ralston Purina, Chrysler, Charles Schwab, Caterpillar, Cummins Engines, and First data.

Activity-Based Management II. Best Practices for Dramatic Improvement

Activity-based Management III. Best Practices for Strategic Implementation

John A. Miller (Subject Matter Expert)

Published in 1999, this 84 page Best Practice Study, again published by the APQC, was titled Best Practices for Strategic Improvement and included MetLife, United States Coast Guard, Applied Materials, Motorola, Owens & Minor, and Nestle.

Activity-based Management III. Best Practices for Strategic Implementation

Activity-Based Costing

Robert S. Kaplan – Harvard University

Many people attribute Activity Based Costing to Dr. Kaplan who was written many papers and articles on the subject. The 15 page paper makes the case for ABC in service companies and for Operational Control Systems.

Activity Based Costing

Cost Management Opportunities

Lawrence S. Maisel

This 11 page document includes sections on Strategic Profit Analysis, Undertaking a Customer Based strategy, Simulating Process Improvements, Justifying Technology Investments, and Costing Operations Changes

Cost Management Opportunities

Cost Management

Cost Management – Articles and Papers

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Acceptable Profit Levels Demand Cuts

by John A Miller

In 1982, the number of rigs drilling for oil and gas in the United States hit an all time high of 4,000+ rigs. On April 24, 1992 only 623 rigs were drilling for oil and gas, the lowest level of rig activity since Hughes tool Company began recording weekly rig counts in 1940. Cost management in this industry was all about cost cutting and downsizing. Survival was at stake.

Acceptable Profit Levels Demand Cuts

Survivalist Cost Cutting. What Government Can Learn from the Private Sector

John A Miller

The cumulative Federal deficit of spending more money than we bring in was $17 trillion at the end of o fiscal year 2013. Sponsored by Grant Thornton and CAM-I, this paper outlines five lessons learned from the private sector: Develop a cost reduction plan, Reduce acquisition cost through strategic sourcing, Streamline operations, Consolidate facilities and operations(footprint reduction), and Reduce headcount

Survivalist Cost Cutting. What Government Can Learn from the Private Sector

Addressing Commodity Price Volatility on Product Development Through A Mature Target Costing Process

Elaine R. Jones and Tami L. Capperauld

This article provides guidance on approaches for responding to price volatility within the target costing process. Target costing is a methodology where new products are designed and made based on a predetermined target cost. Boeing, Whirlpool, Navistar, and Dresser Industries all use the target costing process in developing new products. Because new products often take years to develop, addressing the volatility of commodity prices is critical

Addressing Commodity Price Volatility on Product Development Through A Mature Target Costing Process

Designing and implementing a New Cost Management System

John A Miller

Published in the Journal of Cost Management in 1992, this article introduced a new paradigm for cost management, focused more on managing processes and activities and less on general ledger costs. In this new paradigm the emphasis is on the management part of cost management, where accountants design and implement systems and procedures to report the cost and performance of processes and activities

Designing and Implementing a New Cost Management System. Winter 1992

Activity-Based Management: A Fresh Look at a Mature Tool

John A. Miller

Published by Capital Magazine in June 2006, this article was written for operation managers and senior level executives and makes the case for the new innovations in technology that have enhanced the value of ABM and its use in modern companies competing in the global arena

Activity-Based Management. A Fresh Look at a Mature Tool

Cost Management

Cost Management – Case Studies

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HomeHealth: Delivering Activity-Based Costing

John A. Miller

This case study is one of 14 case studies, each written by a different author, in a book titled Case Studies in Performance Management and published in 2006. This case study is instructive in many ways and demonstrates the key principles of an effective ABC implementation. Excellent example and case study for implementing ABC in a hospital or health care environment.

HomeHealth. Delivering Activity-Based Costing

McCook Community hospital – How to make Time Driven ABC work

Ryan Morthole and Frank van Vliet

This recent 46 page Power Point Presentation provides a great source of material for those in the health care industry and interested in the a time based ABC methodology for hospitals. Power Point slides include First Steps to Development, Development Strategy, Report Examples, Challenges Faced, Cost Drivers, Defining Cost Objects and Patient Grouping, Reasons for ABC, and Analysis and Outcomes

BB McCook Workshop

CITGO Petroleum Meeting the Challenge with ABM

Marlene B. Rodriguez, Andrew D. Muras, and Dennis D. Calhoun

This 18 page article was published by the Journal of Corporate Accounting and Finance in their March/April 2002 edition. The article features the CITGO Petroleum and has 15 exhibits. The article includes and identifies Process Improvements, Capacity Analysis, Shared Services, Examples of Cost Assignment, Outsourcing Decisions, Initial Pilot Project, Implementation Approach, Identification of Non Value Added costs, and a Fast Track ABC Approach.

Citco Petroleum Meeting the Challenge With ABM

Understanding Costs in a Scientific Paradigm: ABM in Manufacturing (Specialty Chemical)

David Woodworth

With over 1,800 products in seven product groups, this US-based specialty chemical manufacturer needed to better understand cost and process flow information. The company’s current costs seemed inaccurate as the company’s competitors were able to be more competitively priced in certain market niches. To solve the problem the company implemented an ABC/ABM costing system. This initiative, undertaken in the early 1990’s, was crude by today’s standards of costing but rich in wisdom, results, lesions learned, and the value of an evolving ABC Model

Understanding Costs in a Scientific Paradigm. ABM IN Manufactuirng. Specialty Chemical

Zippo Lights Up With ABCM

Robert Vecchio, John A. Miller and Andrew Muras

In 2003, Zippo was facing several major business issues. Standard costs were not reflective of actual costs, minimal visibility on product profitability, minimal visibility on manufacturing process costs, and no visibility on customer profitability. To address these issues, Zippo elected to undertake a project to implement Activity Based Costing/Management (ABCM). Zippo subsequently was recognized as a Best practice in Customer Profitability by the American Productivity and Quality Center (APQC)

Zippo Lights Up with ABCM