RWSMC Consulting Partners With Mold Making Technology Magazine To Perform An Activity Based Costing Demonstration Project

Dallas management consulting firm RWSMC has agreed to work with Mold Making Technology Magazine to perform an activity-based costing (or ABC) demonstration project on a mold making shop to be selected. The project will demonstrate the use of ABC to help mold makers improve their costing and business processes, and the mold maker selected will receive the benefits of the project at no cost.

(PRWEB) June 9, 2006 -- Dallas management consulting firm RWSMC has committed to perform an activity based costing demonstration project for the mold making industry. Says Bob Kinsler, lead consultant for the firm, “We made a presentation at the mold making industry convention in Chicago in 2005. While there, we had the opportunity to speak with industry participants and suppliers and learned about the challenges faced by the industry.”

Says Robert Scroggins CPA, RWSMC director of operations “We learned that the U. S. mold making industry faces intense competition from overseas mold making shops, especially in China, and we also learned that many small mold making shops in the U. S. are still doing business they way they did 20 years ago. In order to meet competitive pressures, improve costs, and maintain revenues, many progressive mold making shops are outsourcing operations, using more technology, adopting specialties, and developing strategic relationships. We have seen these strategies achieve good results in other industries, but the average mold making shop is fairly small and may not be in a position to employ or derive great benefit from them.”

Bob Kinsler, lead consultant for RWSMC continues, “As consultants, we have seen many businesses reduce costs, improve operations, and gain a better understanding of their business processes by using activity based costing (or ABC). ABC is a cost analysis and decision support tool originally developed in the 1980s to help large industrial firms improve their product costing and business processes. It has been employed in many situations since then and has proven to be a valuable tool for all types and sizes of organizations. We wanted to see if ABC could be used to help mold makers. After giving it some thought, we decided that it could help but it had to be ‘downsized’ in order to help the smaller mold making shops. They couldn’t justify the time, cost, effort, and disruption of a complete activity based business analysis.”

Scroggins explains, “Much of the effort in implementing ABC is devoted to examining the activities and identifying the costs involved in the direct (or production) operations of a business, but ABC is particularly helpful in identifying the activities involved in the indirect (or overhead) support operations of a business and allocating the cost of support to the direct operations in a timely and rational manner. We’ve found that many businesses have some sort of handle on their direct costs, but they all generally recover overhead costs by including estimates in their sales prices that are based on the direct cost of each sales order. After considering this, we realized that ABC would be more cost effective for smaller mold shops if the ABC effort was devoted primarily to the overhead support operations. By concentrating upon overhead, we could derive 80% of the benefits of ABC at 50% or less of the cost of a complete ABC study.”

Kinsler continues, “We then contacted Mold Making Technology Magazine, and published an article about this in their April 2006 issue. They also agreed to work with us on an ABC demonstration project to be conducted on a mold making firm. The firm chosen for the demonstration will receive many benefits from the ABC project at no cost to them. Mold making firms that would like to be involved in this project can contact Mold Making Technology Magazine at telephone no. (800) 579-8809 or email cfuges @ gardnerweb.com. They can also contact RWSMC at the contact points mentioned in this release.”

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