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Management Control System
Management Control System
From Wikipedia, the free encyclopedia Jump to: navigation, search This article has multiple issues. Please help improve it or discuss these issues on the talk page. This article needs more links to other articles to help integrate it into the encyclopedia. (December 2012) This article may require copy editing for grammar, style, cohesion, tone, or spelling. (June 2012) This article is written like a personal reflection or opinion essay rather than an encyclopedic description of the subject. (April 2012) Management accounting in supply chains (or supply chain controlling (SCC)) is part of the supply chain management concept. This necessitates the need for planning, monitoring, management, and information provision of logistics and manufacturing processes throughout the whole value chain. The goal of management accounting in supply chains is the optimization of these processes. Therefore, this strategy is a form of controlling, focused on the support of management.
Contents
6 Instruments
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6.1 Supply Chain Scorecard 6.2 Cross-Company Activity Based Costing 6.3 Supply Chain Performance Measurement System
Basic facts
As value chains become more and more complex due to globalization, supply chain management (SCM) has gained great relevance in science and practice. The SCM has to take on extensive management control tasks. This range of subjects is summarized by the definition of supply chain-controlling or management accounting in supply chains. In this case the mere transfer of existing Management control systems (MCM) to the SCM is not sufficient, because these mostly aim at internal company needs. Thus an extension respectively an adaption of the instruments of management accounting to the needs of the supply chain is to be made.[clarification needed] Beyond past-oriented and financial business key figures there must be represented also futureoriented measuring figures. Regarding this there are different approaches in literature.
Definition
Supply Chain Management (SCM) has gained a great relevance in science and practice in recent years, especially in light of the increasingly complex supply chains. The SCM has to perform extensive operational management tasks. This portion is grouped under the term of supply chain controlling. However, a simple transfer of existing controlling-concepts on SCM is not sufficient, because they are mostly aligned within the company. Because of this, there must be an extension or adaptation to the needs of an enterprise-cross control. In addition to past-oriented and financial data there must be mapped out future-oriented metrics. For this purpose, you can find different approaches in literature. Seuring[1] has transferred the three major conceptualizations of German-based supply chaincontrolling literature into the supply-chain-controlling, considering the specific demands of SCM: Supply chain controlling concept Criteria Specific problem Informationoriented Decision-related Ensuring rationality of Assuring and maintaining the information provision supply chain ability to coordinate and adapt of supply chain management in supply chain management management Implementing of System building and system supply chain-wide Balancing task-related coupling coordination of information systems and operating staffplanning and control as well as Providing problemrelated bottle-necks in providing information specific information management rationality throughout the supply chain to all actors in the supply chain Performance objective Profit (efficiency, short- and Profit and liquidity system of the supply long-term profit) objectives chain Rationality-oriented Coordination-oriented
The rationality-oriented approach of supply chain-controlling coordinates all actors in the supply chain in order to achieve a common improvement of performance. To that purpose common management systems and instruments for performance measurement are developed, that enable the guidance of both the single company and the entire supply-chain. The
coordination-oriented approach is to support the leadership of the supply chain proceeding on the focal company. Objects of organization are in particular the selection of strategic partners, the distribution of tasks among the companies, the process-management and ensuring the providing of information to all actors. The information-oriented supply chain controlling concept places the providing of the partners with information relevant for decisions into the foreground. An efficient reporting structure has to be implemented. This would include both the strategic and operative organizations of the system, including technical aspects.
Requirements
Challenges within the supply chain are the support of the co-operating companies and to ensure a successful continuation of such cooperations in the future. Also in relation to a successful management accounting in supply chains, companies have to focus on a common design of instruments and targets. For this, a consistent understanding of processes within the participating companies is indispensable. On this mutual basis you can define common metrics across the entire supply chain for example. Furthermore, an intensive exchange of information (including sensitive data) within a supply chain is necessary, in order to use existing optimization potential and to ensure the control of a supply chain. To implement this, the respective in-house information systems have to coordinate. Especially the high complexity of the processes within a supply chain requires additional support tools that allow the constant control of the entire supply chain. The requirements for the management accounting in supply chains are significantly higher than the pure provision of key figures. Nevertheless this function can be described as one of the fundamental tasks.
Planning-Function Monitoring- and Control-Function Information-Supply-Function Coordination-Function Rationality backup- and Reflection-Function
Aims
Because of differing controlling directions, based on the selected management accounting in supply chains concept, different aims are pursued. The specific tasks and functions of an individual management accounting in supply chains and the pursued objectives influence each other. Again, the individual challenge exists in the cross-company character. Completely independent companies must agree on a common strategy on the SCM and finally define common aims. On this basis, the objectives of management accounting in supply chains can derived. Generally, direct and indirect aims can be distinguished.
Direct aims
Direct aims relate directly to the support of SCM and Controlling. For example, this includes ensuring logistical processes between the different actors in a supply chain or the introduction of a common performance measurement system for verification of lead times.
Indirect aims
Furthermore, company-wide or more general aims can be pursued with management accounting in supply chains. Examples could be competitiveness, expanding cooperation, growth, market development, or even more customer orientation (reduce of delivery times).
Instruments
Management accounting in supply chains draws on several modified traditional instruments of managerial accounting to accomplish the specific cross-company objectives. There are two kinds of instruments in Management Accounting in Supply Chains: On the one hand those who try to achieve consistent processes within the supply chain, like for example the Supply Chain Map[2] or the Supply-Chain operations reference-model (SCOR).[3] This is the basic for the use of other advanced instruments for operational and strategic management accounting on the other hand, which are described in the following parts. Compared with traditional instruments in Supply Chain Controlling soft facts are more focused.
Financial Benefits Supply-Chain-Management (SCM) Goals SCM Improvement End Customer Benefits
Independent of the concrete perspectives, each of them should consist of internal as well as of cross-company measures.
Determination of the total efficiency of the Supply Chain (aggregation of cost and performance data) Detailed Cost Analysis (for decisions) Process-benchmarking between the members of the Supply Chain Realization of target costs