Real-time performance analysis in manufacturing with TDABC: a case study in a medium-sized company
International competition forces manufacturing companies to increase their profitability and react to changes in demands instantly. Traditional costing systems can deliver data neither in the required accuracy nor in due time to be of value for decision making under those conditions. This paper combines the idea of time-driven activity-based costing as an approach to provide accurate costing data with the usage of actual and permanently updated lead times in manufacturing to create a real-time TDABC application. This allows management to observe business orders when they are still in the manufacturing process and to evaluate the company’s performance with revenues and costs that have occurred on a daily bases. The research shows how TDABC is applicable in this context and unearths new issues in terms of the implementation process in manufacturing companies, mainly the necessity of a structured cooperation with the different departments and the impact of the IT department in particular.