Management And Accounting Web

CAM-I Conceptual Design
Main Concepts of Cost Management Systems

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

CAM-I Main Page | Cost Management Main Page

Citation: Martin, J. R. Not dated. CAM-I Concepts.  Management And Accounting Web. http://maaw.info/CAM-IConcepts.htm

1. Become proactive rather than reactive – influence operations all along the value chain (design, purchasing, production, distribution, customer service) rather than simply recording transactions and events after the fact (score keeping).

2. Eliminate non-value added costs. Revised concept is to eliminate non-essential activities and waste in all other activities. Note that a non-value added activity may be essential.

3. Emphasize traceability of costs (now referred to as activity based costing ) rather than cost allocations based on a single production volume based measurement.

4. Emphasize life cycle costing and life cycle management rather than only inventory costing (i.e., use a whole life concept).

5. Emphasize a world class competitive strategy , e.g., minimize costs, cycle time, product defects and maximize flexibility and customer responsiveness.

6. Emphasize performance measurements designed to promote continuous improvement rather than short term financial outcomes.

7. Emphasize investment management (analyzing the portfolio of investments and use the moving baseline concept) rather than traditional capital budgeting (analyzing standalone projects using discounted cash flow methods).

8. Emphasize market driven costing (target costing) rather than engineer driven costing (standard costing).

9. Emphasize pull systems (JIT and TOC) rather than push systems.

10. Emphasize the correct sequence in the transition from traditional production (push) systems to CIM , i.e., from traditional push systems, to just-in-time systems, to flexible manufacturing systems, to computer integrated manufacturing systems.

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Related summaries:

Berliner, C., and J. A. Brimson, eds. 1988. Cost Management for Today's Advanced Manufacturing: The CAM-I Conceptual Design. Boston: Harvard Business School Press. (Summary Chapter 6).

Beynon, R. 1992. Change management as a platform for activity-based management. Journal of Cost Management (Summer): 24-30. (Summary).

Campi, J. P. 1992. It’s not as easy as ABC. Journal of Cost Management (Summer): 5-11. (Summary).

Coburn, S., H. Grove and C. Fukami. 1995. Benchmarking with ABCM. Management Accounting (January): 56-60. (Summary).

Cokins, G. 1999. Using ABC to become ABM. Journal of Cost Management (January/February): 29-35. (Summary).

Cooper, R. 1996. Activity-based management and the lean enterprise. Journal of Cost Management (Winter): 6-14. (Summary).

Hammer, M. 1990. Reengineering work: Don't automate, obliterate. Harvard Business Review (July-August): 104-112. (Summary).

Keys, D. E. 1994. Tracing costs in the three stages of activity-based management. Journal of Cost Management (Winter): 30-37. (Summary).

Martin, J. R. Not dated. Activity based management models. Management And Accounting Web. http://maaw.info/ABMModels.htm

Martin, J. R. Not dated. CAM-I Graphics. Management And Accounting Web. http://maaw.info/CAM-IGraphics.htm

McGowan, A. 1999. Impacts of ABCM on job performance and environment. Journal of Cost Management (March/April): 32-36. (Summary).

Pryor, T. 1997. Making new things familiar and familiar things new. Journal of Cost Management (Winter): 38-42. (Summary).

Reeve, J. M. 1996. Projects, models, and systems -Where is ABM headed? Journal of Cost Management (Summer): 5-16. (Summary).

Sandison, D., S. C. Hansen and R. G. Torok. 2003. Activity-based planning and budgeting: A new approach. Journal of Cost Management (March/April): 16-22. (Summary).

Shields, M. D. and S. M. Young. 1989. A behavioral model for implementing cost management systems. Journal of Cost Management (Winter): 17-27. (Summary).

Sweeney, R. B. and J. W. Mays. 1997. ABM lifts bank's bottom line. Management Accounting (March): 20-22 and 24-26. (Summary).