Cost management as an accounting activity is focus of the accounting system on providing cost information on objectives relevant for cost management.
Cost management as a managerial activity of managers of various departments is understanding cost drivers and their impact on the cost. Hence cost drivers are to be planned or usage of cost drivers (activities that use resources) has to be planned to give the desired result with minimum cost possible. The first focus is on getting the desired result and the next focus is one cost.
http://ciitcm.in/site/tcm/tcmcont.jsp?desc=285888&subdesc=287915#LEVELS OF TCM MATURITY MODEL
CII TCM Maturity Model - Pdf File
http://icmai.in/upload/Institute/NCC_2013_Presentations/TCM-Maturity-Model.pdf
http://www.thehindubusinessline.com/todays-paper/tp-mentor/modelling-cost-management-maturity/article1087018.ece
http://ciitcm.in/site/tcm/tcmcont.jsp?desc=285888&subdesc=287915#LEVELS OF TCM MATURITY MODEL
CII TCM Maturity Model - Pdf File
http://icmai.in/upload/Institute/NCC_2013_Presentations/TCM-Maturity-Model.pdf
http://www.thehindubusinessline.com/todays-paper/tp-mentor/modelling-cost-management-maturity/article1087018.ece
CII TCM Division LinkedIn Account
Level 1 - Minimal Level
• Features
– Financial Report Driven
– Collection of costs at “Cost Centers”
– Cost awareness only at senior management level
– Inadequate for the Managerial Reporting and Control
– Assignment of only manufacturing / operating expenses to products/ services
Level 2 - Functional Level
• Features
– System driven Data Support
– Material cost is in place for the evaluation and compilation of the product wise / customer wise
with built in wastages
– Information Technology is interfaced. – Cost measurement not driving cost improvement initiatives
– Cost information more supportive of operational decision making & less for strategic
Level 3 - Operational Level
• Features
– Synchronization of financial accounting and cost accounting
– Both Material costing and process costing based on acceptable cost accounting standards
– Effective utilization of cost data for improvements (such as Kaizen)
– Operational support for budgeting process
Level 4 - TCM Enabled
• Features
– System support to strategic decision making – Integrated cost system in place
– Customer focused cost measurement & management
– Operational excellence reinforced continuously through cost management
– Cost management link with business strategy explicitly articulated
– ERP System providing total solution for cost management requirement
Level 5 - Exemplary
• Features
– Systems and procedures followed become a trend to other companies
– Companies in this category are ICONIC
– Drive cost structural's in a particular industry
– The internal system is designed to minimize and absorb both national and global uncertainties
– Achieve an edge in having a cost advantage in external value chain
Internal Benefits
• Strategic Benefits
– Multi product/service profile
• P/L of Product / Service emerges from a sound cost management system in an organization
– Customer Profitability
• Customer Profitability review highlights the pattern & flow of cost, enabling informed decision making about the viability
– Competition
• Rating facilitate the organization to
– Review its cost structures continuously
– Draw a road map to enable metamorphosis to next level
– Capital Projects
• Scientific basis for the evaluation of project viability
– New Product Development
• Simulations of existing process data at multiple stages to establish product viability
Companies Associated with CII TCM
ITC (2 units)
Godrej & Boyce (8
Divisions)
Escorts, Faridabad
Amararaja batteries,
Tirupathi
Hyderabad Industries
Subros, Noida
JCB, Ballabgarh
Kirloskar Brothers, Dewas
Hi tech arai, Madurai
Menon & Menon, Kolhapur
Cavin Kare, Chennai
• Kirloskar Vadi
• Wipro engineering – B’lore
• JSW Steel– Bellary
• Shree cement – Jaipur
• ITW Signode - Hyderabad
• Tata Motors - Mumbai
• Grundfos pumps - Chennai
• Rajashree cement – Malkhed
• Wheels India - Chennai
Total Cost Management Framework AACE International
Interesting discussion of strategic asset management and project management of asset projects.
Feed 41
Ud. 17.11.2023, 1.7.2023
Pub. 12.11.2016
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