Goodbye Job Cost Accountancy--Dickeson
Surprise, surprise. We can shift to a process model that makes a lot more sense, that offers far better decision support and even begins to harmonize with general ledger costs. I call it SPPM for Statistical Print Production Management. It's a variant of activity-based costing to which Drucker tells us other industries are shifting.
They've successfully shifted because they had to. New, powerful information available to them on their intranets, extranets and the Internet made it essential. Supply-chain management using the Internet is becoming a way of life. With activity-based costing, those industries are focusing on nonuse and misuse—reducing the cost of not doing—while improving quality and satisfying customers. We can't just sit here batting our eyes like a frog in a hailstorm, sweeping all our nonuse and misuse under the chargeable job cost rug any longer. The Internet won't go away.
Start with this premise: Any activity consuming time or materials in the print process that doesn't result in value-added product in the hands of the customer is a loss. Changeovers, stops, makereadies, trashed materials, waiting and idle time are misuse and nonuse. They are process loss and must not be hidden away in job jackets. They must be openly measured and managed. Just as Drucker says, when they are visible as process activities, productivity jumps up.
Like it or not, e-commerce and the Internet are forcing the print productivity issue upon us. As Drucker notes, it's bringing with it a booming future for printed product. So let's get with it and bid a fond farewell to job cost accountancy.
—Roger V. Dickeson
About the Author
Roger Dickeson is a printing productivity consultant based in Tucson, AZ. He can be reached by e-mail at firstname.lastname@example.org, by fax (520)903-2295, or on the Web at http://www.prem-associates.com.