SAMPLEFLIPCHART,HANDOUT,OROVERHEADPRESENTATIONACROSSFUNCTIONALCOSTANALYSISOFXYZCOMPANYANYTOWN,U.S.A.ORIENTATIONMEETINGWEDNESDAY,MAY18-9A.M.ArthurAndersen&CompanyCROSSFUNCTIONALCOSTANALYSIS·LooksatAllCosts-FocusesonIndirect·CauseandEffectReview·TiedtoEverydayDecisionMaking·CrossFunctionalCostAnalysis-Generators-CostDrivers-Activities-CostResponses-Measurement-KeyPersonsDiscussions-Evaluation-CostQuestionsResult-OPPORTUNITIESFORIMPROVINGPROFITABILITY--------------------------------------------------------------------------------------------------------KEYPERSONPARTICIPATION·IndividualDiscussions(one-hourmaximum-45minutesaverage)-ByAppointment-YourWorkPlace-PercentEffortbyActivity-WhatCausesThisEffort?-WhatOneThingWouldMakeYourWorkEasier?·SomeAdditionalFollow-up(asneeded)DEFINITIONOFKEYTERMSThekeytermsusedincrossfunctionalcostanalysisareasfollows:OPPORTUNITY-Achangeinmethodofoperationthatmanagementcanimplementwithineighteenmonthstoimprovetheeffectivenessorefficiencyofaprocess.FUNCTIONALCOSTANALYSIS-Thetechniquethataddressesthefunctions,processes,andactivitiesbeingcarriedoutintheorganization.Establishesacostrelationshiptoeachactivity.Allowsmanagementtodefinewhichactivitiesshouldbeeliminatedorreducedandwhichrequireadditionaleffortorresourcestoachieveoptimumefficiency.ACTIVITYCOSTGENERATOR-Atransaction,event,orproductthatcausesworkactivitiestooccur.Itisthelowestlevelofcostmanagement.Examplesincludethecostofasalescall,orthecosttoprepareasalesorder.ACTIVITY-Aprocedureperformedinthenormalcourseofcompletingafunction.Examplesincludeestimatingsalesvolumesfortheannualbudget,specialorderhandling,andproductlineplanning,processinginvoices,interviewingcustomers,etc.FUNCTION-Theseriesofactivitiesperformedculminatingintheprocessesofacquiringandenteringorders,acquiringandcontrollingmerchandise,producingcomponentsandproducts,etc.INTERVIEWGROUP-Agroupofpersonnelwhoperformrelatedactivities,typicallyreportingtoonesupervisor.TheinterviewgroupisthebasicdatacollectionunitoffunctionalcostanalysisandisasubsetofaGROUP.GROUP-Alogicallysegregatedbusinessarea,department,organizationalunit,orareaofresponsibility.Examplesincludeachemicaldivisionandasalesdepartment.ACTIVITYEFFORTWORKSHEETINSTRUCTIONSTheseinstructionswillhelpyoucompletethe“ActivityEffortWorksheet”(AEW).Pleasemakecopiesoftheattachedformifyoufeelyouwillneedmorethanonepageforyourallocations.Acompletedexampleisincludedforreference.1.CompletethetopoftheAEW.Name:Title:(YourTitle)Phone#:(AreaCode,Number,andExt.)Division/Dept.:(TheDivisionorDepartmentyoureportto)InterviewGroup:(YourspecificAreaorReportingUnit)PeopleinGroup:(NumberofpeopleincludedonyourAEW)2.IntheAEWcolumns,indicatethepeopleandjobtitleswhoreportdirectlytoyou.A.Ifseveralpeopleperformthesameactivitiesinthesameproportions,includetheminonecolumnalongwiththeirclassifications.ListtheirnamesandemployeenumbersatthebottomoftheAEWoronaseparatepage.B.Ifonlyonepersonperformscertaintasks,enterthepersonandhisorherpersonnelnumberontheworksheetinaseparatecolumn.C.Thereisroomforeightdifferentpersonnelgroupingspersheet(i.e.,columnsontheAEW).Iftherearemorethaneightgroupingsinyourinterviewgroup,addadditionalsheets.3.Concentrateyourthoughtprocessononlythosefunctionalareasyouandyourinterviewgroupperform.(SeeActivityTableofContents).Skimtheactivitydefinitionsforotheractivitiesyoumayperformoccasio...
