Development stages of strategic cost management in flexible manufacturing system and proposed integrated model

Business management requires to benefit from highly reliable data and analyses during the process of making and implementing strategic decisions. It is desired that these data are prepared in a professional way and reflect the actual state of the business. Because some of these decisions may be very important that effect the existence and future of the businesses. The ability of top executives to make right decisions depends on the ability of the firm to analyze both the past and the present well and to plan for the future. The basis of this effective analysis and reliable information is a well-run cost management approach in the enterprise. The aim of the study is to provide an integrated model for enterprises that use advanced technology and flexible production systems to determine their current status, develop and execute planning and control activities effectively in strategic cost management process. In this context, the production, management and accounting systems of a production business, which uses flexible production system, was examined and its current situation was presented. The unit costs of the products produced by similar production system are collected in the same group and the cost of production is calculated using traditional costing and activity based costing methods. In terms of planning activities, sample budget tables were prepared for some activities by using activity based budgeting and target costing and cost analyzes were applied. Finally, the use of the data obtained in the study in strategic decisions was evaluated and various comparative analyses were included. The result of this study, the process of applying strategic cost management to a production company using advanced technology has been examined in five phases. These phases are; enterprises move without using a certain cost system (Stage 0), the implementation of the traditional costing method (Stage 1) and the implementation of the activity-based costing (Stage 2), activity-based budgeting (Stage 3) and target costing (Stage 4) methods. If the enterprises determine which stage they are in, the roadmap they will follow in cost management is presented as a model. In addition, it is concluded that activity based approaches are effective applications in cost control, performance appraisal and planning studies. Keywords: Cost accounting, activity based costing, flexible production, strategic cost management