ABC System: Boon to Manufacturing Concerns

In today's time of fast technological modification, tough global and domestic competition, total cost management is central to sustained corporate gain and competitiveness. The management mantra now days are conquering your costs, before these conquer you. Cost means total cost to the client. The cost leadership strategy doesn't mean compromise on either quality or technology or product differentiation. Low costs are no advantage if customers are not willing to buy the products of low cost firms. Cost management must be driven with client as the focus. The firms are successful in capturing correct cost and profit information from their ABC cost systems for value chain and supply chain analysis. The results recommend that firms have higher insights for benchmarking and budgeting with ABC cost system yet the consistency in their priority of budget goals is lacking unlike firms that are using traditional costing systems. However, both the ABC and traditional cost system users have clarity of reasons for effective implementations of planning and budgeting method in their organizations. This paper essentially highlights on ABC System along with its difference with traditional system and steps involved in its implementation.