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Supply chain management: monitoring strategic partnering contracts with activity-based measures: second-generation ABC systems may be the wave of the future, not just for TQM but now also in supply chain management. In a creative tale of a fictitious small-town business, the authors illustrate why.
- Article from:
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Management Accounting Quarterly
- Article date:
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September 22, 2006
- Author:
- Thomas, Michael F.; Mackey, James
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Copyright informationCOPYRIGHT 2006 Institute of Management Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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EXECUTIVE SUMMARY Traditional management accounting systems are not designed to link nonvalue-adding activities and the resulting cost variances they can create to their causes, such as poor quality or inefficiencies in upstream activities. To improve supplier performance, management accounting systems should measure activities such as on-time deliveries and complete order filling.
Highlighting the growing importance of the management accounting system's role in supporting supply chain management (SCM), a 2003 Institute of Management Accountants (IMA[R]) article began with this statement: "As competition continues to intensify, more and more companies are competing ...