Thursday, October 1, 2015


Cost Accountants have been following the heard of traditional areas of cost accounting areas. We need to get into the global platform but for that we need to have the hunger of quest.  My today’s research is on one of the strongest areas where demand is increasing and we are less competitive in this segment. Cost of production can be highly affected if improper supply chain management is developed. Cost Accountants play a pivotal role in designing the structure. Today big data analytics could easily help to lower the cost of supply chain management and also idle time of goods lying after manufacturing. I will be presenting the research in several parts so that readers don’t get confused and it can be taken up in an easy way.  

The global supply chain has changed dramatically and the cost of operation for the same has also come down significantly but what we have ignored is warehouse cost which is just escalating as land prices are going up. We are discussing about Global International levels of storage facilities where goods are being parked to supply to European countries or Middle East or Asian countries. The time has gone when goods needs to come from direct factory to the vendor. Now goods are produced and parked at different locations and when there is a order the same is being matched with the storage and supplied to the different places. Hence what is the demand of the time is efficient deployment of cost accounting tools through which one could be utilized to increase the efficiency in designing the new automation process of the supply chain management.

Simulation models are being used to design the new model of supply chain management where manpower cost is being reduced and robotics are being used in the warehouses. The point to noticed is that manual operation of warehouses are too high hence automated ware house storage facilities and supplies are being designed to the factory gate. This reduces much cost compared to the manual operations.  Online sales has grown stupendously hence global supply chain management also needs to catch up with the same.

Currently its being found that online sales are not only happening through desktop or computers but through smart phones. Those who don’t have computers in remote places, they use smart phones to shop online.   In my recent research I have found that across the globe countries like Brazil is the highest ranking country worldwide in terms of retail sales that are influenced by mobile devices, citing 40% of eCommerce site traffic coming from mobile devices. Other markets show a growing mobility trend, especially China (75% smartphone ownership, 46% purchase via smartphone) and India (72% smartphone ownership, 40% purchase via smartphone).

Now cost accountants needs to come ahead to design the platform of warehouses and supply chain management. We cost accountants needs to understand that Cost reduction is among the most cited objectives in supply chain management. Additionally, if costs are to be reduced, companies increasingly turn their attention to their supply chain partners, so both suppliers and customers reach out for new frontiers of competitiveness and profitability.

 In this increasing dynamic consumer minds supply chain management needs target costing approach where the profitability and price of the product don’t become uncompetitive. Yes this is a key area which is often ignored Target base costing would help to do cost trade offs which will enable the industry top grow. One of the modern ways of this trade off is that creating “Ware-House wells” in every country in such a way that supply chain management don’t become a burden on the cost of production. The mantra is well clear that the successful companies will be those whose supply chains are more cost-effective than those of their competitors.


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