The Transformation from Traditional Management Systems to...

Executive Summary Traditional management systems rely on volume to allocate overhead. Indirect cost is allocated to items such as direct labor hours, units produced or the production of machine hours. Using only single cost drivers, potentially distorts cost estimates especially when dealing with high volume production. The implementation of Activity Based Costing serves as a solution to this downside in traditional systems. ABC utilizes various cost drivers both volume and non-volume related to estimate costs, providing more accurate estimations. Although this method benefits managers in providing the information needed for decision making and improving efficiency of business processes, it still is only limited to the internal aspect of†¦show more content†¦Bianco (2011) supports the fact that firms within the traditional channel see themselves as independent businesses that seek the lowest purchase price and increase sales prices to gain higher profits. It further states that traditional me thods result in diseconomies caused by redundancies, usually in the case of inventories. The lack of technology in traditional systems does not provide very much coordination with the supply chain. As a result there is possible delay in delivery of products and services from the supplier to the customer. Additionally the unavailability or delayed delivery of customer information takes away from adding value to customers and may in turn decrease profitability and performance. â€Å"Advances in information technology have radically changed access to information and in turn the business landscape, so much so, that the current business era is frequently referred to as the information age.† (Jiambalvo 2007, p. 14). As technology continues to advanced companies are realizing that in order to keep up the pace in a competitive global market there is a need for change in the way they conduct business regarding suppliers and customers. Companies are moving towards systems such as Supply Chain Management and Customer Relationship Management Systems that are more efficient in processing information and fuel improved operation of the value chain and interactions with suppliers andShow MoreRelatedLogistics: Management and Supply Chain1566 Words   |  7 PagesCorporate strategy Business strategy Operations Strategy Mission Objectives (cost, quality, flexibility, delivery) Functional strategies in marketing, finance, engineering, human resources, and information systems Strategic Decisions (process, quality system, capacity, and inventory) Distinctive Competence Consistent pattern of decisions Operations Strategy Process (Figure 2.1) 2-2 Course organization Logistics Semester 1 Block 1 Year 1 Block 2 Read MoreEssay On Supply Chain Management1427 Words   |  6 Pages CLOUD COMPUTING BASED SUPPLY CHAIN ABSTRACT Cloud computing can give the ability of flexibly outsourcing software for supply chain management collaboration and its infrastructure. 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