Time-Driven Activity-Based Costing and Management in Service Procurement
As Benjamin Franklin once said, “time is money”. It is time-driven activity-based costing which embodies this equation. According to Kaplan and Anderson, TDABC has only been recently applied to business process improvement. Nevertheless, in combination with barcode assisted time studies, TDABC is a strong tool to create reliable data for management decisions. The operations of a white-collar department with 17 employees can be completely X-rayed by one project manager in less than a month. The outcome shows what the employees do on average. Therefore, the process optimization can prioritize and focus on activities with big impact and easy applicability to produce quick results. The application of TDABC for process optimization has to be seen as a tool for total quality management: decisions are supported by empirical time study data and waste is eliminated.