Subido por Nathaly Romero

ValuestreamCosting (1)

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Value Stream Costing
Mahmoud Al-Odeh, PhD
Bemidji State University
A member of the Minnesota State Colleges and Universities system, Bemidji State
University is an affirmative action, equal opportunity employer and educator.
Objectives
• Value Stream Costing (VSC)
• Drawbacks in standard costing
• Case study on implementing VSC.
Value Stream Process
GATHER
DATA
PERFECTION
DEVELOP
ACTION
PLAN
DEVELOP
FUTURE
STATE
DEVELOP
CURRENT
STATE
Value Stream Costing
• Developed in 2003 by Maskell and
Baggaley as an instrument to facilitates the
calculation of production cost.
• VSCA shows how resources are used
within value stream.
• VSC main advantage the simplicity in use,
which helps reducing waste.
Value Stream Costing
• VSC deals with tracking revenue and the
associated variable costs required to
generate revenue.
• Not to spend funds unless they are
associated with generating revenue.
• VSC provides better information for
decision-making it has a positive impact for
effective cost control.
Value Stream Costing
• VSC is typically calculated weekly (bi-weekly
or monthly) and it takes account of all the costs
in the value stream.
• No distinction between direct costs and indirect
costs; all the costs within the value stream are
considered direct.
• Costs outside of the value stream should be
eliminated.
• The total value stream cost includes all labor
costs; both traditionally direct costs and
traditionally indirect costs.
Value Stream Costing
• The production material costs are generally
calculated from how much material has been
purchased for the value stream during a particular
week.
• For this material cost to be valid there needs to be
low raw materials and work-in-process inventories;
and these inventories must be under good control.
• If inventories are low, then the materials brought
during that week will be used quickly and will
accurately reflect the material cost of the product
manufactured that week.
Value Stream Costing
• Machine cost is calculated based on the
time life of the machine to find the cost per
minute.
• Support costs like spare parts and soft
tooling are purchased for the value stream
and the costs of consumables, supplies,
and other day-to-day expenses are
assigned to the value stream.
Value Stream Costing
Material
Cost
Machine
Cost
Employee
Cost
Value Stream
Support
Costs
Traditional Costing
• Traditional costing is designed to support mass
production.
• Standard costing allocates all overhead to products
and relates the overhead to direct labor hours.
• Standard costing encourages non lean behavior by
focusing on utilization of resources, people’s
individual efficiencies, and overhead allocations.
• Standard costing calls for elaborate and wasteful
data collection systems.
• Standard costing does not provide the data needed
to support and encourage lean manufacturing.
Traditional Costing
VSC
Reduce the cost by making Make as needed products
more product
Build just-in-case inventory Focus on Value Stream
Costs rather than
departments costs
Reduce the cost by utilizing Improve the available
resources to the maximum Capacity
Reduce non- productive time
Reduce the cost by
optimizing department
efficiencies
Track direct, indirect,
No distinction between direct
overhead costs
or indirect costs
Relates the overhead to
All costs of the value stream
direct labor
are considered direct costs
Case Study XYZ industries
Bearings UC 208
UC 208
Customer Oder
Working Hours
Break
Raw Material
Working day/
week
5000 monthly
Two shifts – 12 hours
each / day
One hour/shift
Monthly
7 days
Factors used in VSC
•
•
•
•
•
•
Total Available Time
Productive Time
Non-Productive Time
Value-Added cost
Available capacity
Non-value added cost
Bearings VSC
Process
Designing
Purchasing
Preparation
Processing (includes
Material Employee Machine Other Total Cost
Costs
Costs
Costs
Costs
$1.70
$5.20 $6.90
$2.10
$2.10
$460.00
$8.50
$2.80
$471.30
$92.00
$6816.67
$428.54
$7337.21
Assembling, Finishing, Packaging)
Maintenance
Marketing & Customer
Service
Shipping
Accounting
Total
$25.00
$577.00
$1.10
$1.10
$1.40
$1.40
$8.08
$33.08
$2.40
$2.40
$6841.95
$431.34 $5.20 $7855.49
Current State
Bearings Processing – Before
Processing
ValueAdded
Time
Bar cutting
13.89
$166.67
$2.91
$169.58
Upsetting
9.72
$116.67
$2.78
$119.45
Piercing
16. 67
$200.00
$2.86
$221.86
Annealing
180.56
$306.58
$2473.24
CNC machine
145.83
$22.00
$97.38
$1869.38
Drilling
90.28
$25.00
$8.61
$1116.94
Threading
48.611
$24.00
$583.33
$7.42
$614.75
Inspection & Packing
62.5
$2.00
$750.00
Total
568.06
hours
$92.00
Material
Costs
$19.00
Employe Machine
e Costs Costs
$2,166.67
$1,750.00
$1,083.33
$6,816.67 $428.54
Other
Costs
Total
Cost
$752.00
$7337.21
Future State
Bearings Processing – After
Processing
Bar cutting
Upsetting
ValueAdded
Time
Material
Costs
13.89
Employe Machine Other
e Costs Costs Costs
Total
Cost
$166.67
$2.91
$169.58
9.72
$0.00
$116.67
$2.78
$119.45
Piercing
16.67
$19.00
$200.00
$2.86
$221.86
Annealing
90.28
$0.00
$1083.33 $306.58
$1389.91
145.83
$22.00
$1750.00 $97.38
$1869.38
Drilling
90.28
$25.00
$1083.33
$8.61
$1116.94
Threading
48.61
$24.00
$583.33
$7.42
$614.75
Inspection & Packing
62.50
$2.00
$750.00
$752.00
477.78
hours
$92.00
$5733.33 $428.54
$6253.88
CNC machine
Total
Achievements
Factor
WIP
Value- added time
Non-Value- added time
Not used
Total time available/ Month
Total Cost
Productive time
Non- productive time
Available capacity
Value-Added cost
Non-value added cost
Customer not ready to pay
Before
After
82.72
69.57
568.1 hours
477.8 hours
47.37 hours
39.83 hours
56.57 hours
154.4 hours
672 hours
672 hours
$7337.21
$6253.88
85%
71%
7%
6%
8%
23%
$6816.67
$5733.33
$568.44
$478.00
$1083.33
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