Explicit Cost Dynamics: An Alternative to Activity-Based Costing

Rating:
Summary: That was my objective
Review: In writing this book, my objective was to cut through the fog created by all existing cost accounting approaches to understand just how costs behave and how to influence them. We are told and tend to believe that increasing productivity automatically reduces costs. But if the person still works for you and receives the same salary, their cost is the same no matter how productive they are. This and many other costing concepts are mathematically and logically invalid, so ECD corrects them.

I would recommend the papers as supplements as M Britton mentioned. Explicit Cost Dynamics is a technical foundation upon which lots of concepts are built. Essentials of Capacity Management takes a critical explicit cost dynamics concept, resources, and explains their operational and financial dynamics. The papers are based on consulting experiences and challenge existing management thought. Is time money? How do I create a reliable business case? Does target costing really have an impact on the bottom line as described? What is the true impact of inventory reduction on cash flow. What is the true value proposition for technology implementation?

Those who have shared their implementation with me have been extremely pleased with the results. The problem is, no one wants to talk about it because they do not want to give away the secrets to their costing philosophy! Why tell a competitor that you know something about costing that they don't?

Rating:
Summary: Costing Clarified
Review: Reading this book created a clear understanding of how costs really work in our company and it helped us get past the age old costing myths that created bad decisions. I went to the authors website and the articles made the concepts that much clearer. Just in the pilots that we have run with ECD we have found that we made a unexpected improvements on our project costing and our product pricing. More than any other book that I have read lately this book helps us create a substantial competitive advantage in our market. It has become my costing bible.