Operational ABM
Operational ABM is about ‘doing things right’. Those activities which add value to products can be identified and improved.
Activities that do not add value should be reduced in order to cut costs without reducing product value. Where for example a product or service has been estimated to require a longer activity time than other products or services then every effort should be made to find ways of reducing the number of hours required.
Strategic ABM
Strategic ABM is about ‘doing the right things’ using the ABC information to decide which products to develop and which activities to use. It can focus on profitability analysis, identifying which products/customers are the most profitable and for which sales volume should be developed.
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