The Solution
Process maps, profitability assessment and notes for reducing expenses are some of the steps in strategic cost management.
“Costs were not meant to be controlled. Costs were meant to be reduced.” Taiichi Ohno.
“Understanding the cost of goods sold allows you to develop superior strategies that will produce a competitive advantage.” The objective of cost management should not only guide product pricing, but identify opportunities to reduce expenses to increase profitability.
Cost accounting seeks to analyze the entire value chain from the acquisition of raw materials to the final consumer. Its main purpose is to provide the information your business needs to provide the value, quality and opportunity that your customers desire.
It is implemented through analysis of the value chain, its strategic positioning and the study of its fixed and variable cost drivers, thus enabling the marketing competitiveness of your business.
Mapping and data mining to feed the cost model such as expenses, fixed costs, labor, raw materials, fixed assets, among others.
Structuring and modeling costs according to the decisions to be supported. For each type of decision, different costing models can be structured. The main ones are Variable Costing, Absorption Costing and Standard Costing, but depending on the decisions, UEP or ABC can be used.
Development of a cost system that allows receiving all input data and generating information to support decision-making with a view to reducing costs or subsidizing pricing.
Process maps, profitability assessment and notes for reducing expenses are some of the steps in strategic cost management.