Operation Management and the cost
Chapter-1
INTRODUCTION
This article
aims to discuss how the cost management models both traditional and activity-based,
can support operations planning and strategic management in globalized
corporations. The article also intends to verify the adequacy and efficacy of the application
of the activity-based costing method for planning and controlling globalized
operations. Today there is a great world
movement of capitals and productive resources seeking for more favorable
locations to attain their corporate goals. These changes are motivated by a
competitive logic, in which companies may decide about re-directing capitals,
equipment and people all over the world, in their search for new markets and
for more economic locations. In this context, companies need to clearly
identify their competitive strengths and weaknesses. The information on the
profitability of products, processes and trade channels in different countries
- and even in inter-countries operations -, are indispensable for the project
and for making new businesses feasible. The adequate structuring of the
processes and products engineering in globalized manufacturers favors the
assessment of production costs in different markets, by means of performance
indicators that take into consideration not only economic-financial aspects,
but also operational, technological and institutional ones. At present, many
works seek to
understand how different cost management models may help
companies with their choice for more advantageous corporate actions, thus
becoming more profitable and competitive.
The alignment between the companies’ cost management methods and competitive
strategies allows obtaining improvements in globalized operations productivity
and competitivity.