1. PLC and
R&D
THE PLC AND R&D is purposely discussed in
Last, The First TASK in ABC3M is to establish DISTINCTIVE ADVANTAGE
and that advantage can not be monetize if Products/Services offered do not
create Value Addition to its users and thus PLC and R&D are the main
Function of EACH AND EVERY SME.
R&D Allows companies to identify newer, better
distinctives ways to apply technology developments to existing and new function
which are essential to users.
And PLC allows commercialization of same with planned life
cycle, At same time each one is driving other, as PLC demands newer technology
from Science and R&D creates newer application opportunities with its findings
the process continues and again and again SME can rediscover its DISTINCTIVE
ADVANTAGE.
Anther important aspect we must pay attention to is WHY SME,
SME’s are always on ground, BOD of SME are directly involved into all
operations, they can spot opportunities and Inefficiencies more quickly than
Large Companies and can make decisions much faster due to smaller
organizational structure and can take advantage more quickly. Same time they
can rethink solution more unorthodox way or employ specialists rapidly to find
cross functional applications and participate in Product Development Process
directly.
The resource problem of SME and Specially Start Ups can be
easily managed after ABC3M implementation and thus making them first
choice for change.
Another factor in same, Cost of Failure is comparatively
small in terms of money in SME, which is often big for SME or START UP
considering size of resources but they have advantage of staying small in that
case as well. Which they can use to their advantage by teaming up with other
Industry Players. And ABC3M is there to help them is same.
The Management Accountant need to Participate in this
process by adding value to following questions:
1.
Does Functional Analysis is done for Each
Product and Service Offered
2.
Does target Costing Exercise Carried out for
Each Product
3.
Future Product Line are explored on the basis of
Overall Functional Analysis or Not?
4.
Is QFD is Integrated with Value Chain Analysis?
5.
What is Value Improvement Process for each
product line?
6.
Does Alternative Material Development Exercise
is carried out for BOM Optimization
7.
Does Company have Price Elasticity Validation
Mechanism?
8.
Has PLC Department has clear import substitution
strategy with analysis for identified value driver analysis in the line of ABC
Analysis for priority setting
9.
***** What is BEP Point company and on what date
it is attained?
10.
What is Marginal Cost Point for Company for Each
Product Line and Overall Capacity
11.
What is List of Sunk Costs Company has incurred
so far and how company is going to use these Sunk Cost Elements to use in
future to take advantage of lost efforts?
12.
What is Product Benchmarking Process?
13.
What is Competitive Product Development
Strategy?
14.
Are products are Engineered from Scratch or are
re-engineered?
15.
Is Functional Benchmarking is done for products
16.
Is Strategic Product Placement Plan exists?
17.
Does Products are developed considering global
demand and Cost Leadership?
18.
Does Government Policy Shifts and Norms like
Pollution Control and Energy Footprint while manufacturing and use are used
while Product Development?
19.
Does QFD Exercise is validated by PEERS in
Industry without Risk of losing key information or misuse of exercise?
20.
Does Capacity Planning and Timing adjustments
are done for Product Introduction?
21.
Does First Mover Advantage and Second Mover
advantage analysis is carried by Company?
22.
Does Manufacturing Process Compliance is carried
out before finalization of Product Features?
23.
Does Functional Analysis System Technique is
part of Product Development Process?
24.
Does Target Costing Approach is applied for
Product Development?
25.
Is Life Cycle Costing is Carried out by BOD AND
EXECUTIVES?
26.
Is Inflation is Considered as part of Target
Costing?
27.
Does Economic Uncertainties are considered while
simulating for Target Cost?
28.
Is Sensitivity Analysis is carried out for
Alternate Method of Manufacturing and Material Planning?
29.
Does Overall Contribution of Expected Product is
Benchmarked with current products?
30.
Is Product Development is done considering
Target Efficiency/ Utility Attainment for User?
31.
Does Product Specifications are revised to skip
operations steps or elimination of Non-Value Adding activities?
32.
Is Premium Earning Specification Studies are
carried for Product Feasibility Study?
33.
Does Cost Driver Analysis for Comparison for Proposed
Product is maintained over a period of Time?
34.
Does SCM Department provides inputs into Product
Development?
35.
Is Testing Equipment’s owned by Company?
36.
Is Labour Cost and Other Cost Reduction along
with Manufacturing Capacity Analysis is carried after Prototyping?
37.
Does Govt Benefits linked with R&D are
availed by Company?
38.
Does Vendor’s are made part of QFD to improve on
manufacturing process?
39.
Is Complementary product analysis is carried by
company?
40.
Does Multi location Operations are supported by
Product Development Team for better operations planning and maintaining
confidentiality?
41.
Is Design of existing products is improved for
reducing manufacturing cost?
42.
Does Joint Products and By Products are mapped
while product development process and treated as separate products with
distinctive applications and cross industry applications?
43.
Is Sunk Cost Analysis related to Product
Development is carried out before making funds allocation?
44.
Is Decision Tree Analysis is carried out before
committing to new product development?
45.
Is Key Tools like Statistical analysis or
Material Chemistry Analysis is key part of Product Development and kept as
standards for performance in R&D Department and individuals are properly
trained for use of them?
46.
Is BEP analysis is carried for Product
Development Budgeting?
Is manpower allocation is done as per project priority and knowledge level and capacity of individual by department head?