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V alue ‐A dded M anagement : A P owerful T ool F or R educing C osts
Author(s) -
Thorne Helen
Publication year - 1993
Publication title -
australian accounting review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.551
H-Index - 36
eISSN - 1835-2561
pISSN - 1035-6908
DOI - 10.1111/j.1835-2561.1993.tb00371.x
Subject(s) - value (mathematics) , business , computer science , machine learning
Value‐added management is a powerful tool which can help businesses reduce costs. Evidence from the US and from Europe suggests that in many organisations at least 40% of costs can be eliminated without any deterioration in the value provided to customers. Conventional management accounting systems have not identified this non‐value‐added activity, largely because they have ignored inefficiencies between processes. Using a value‐added management approach, non‐value‐added activities are identified and programs implemented to eliminate them. This paper considers what is meant by value‐added management, why it is necessary and how it can be implemented. The paper includes examples of businesses which have used value‐added management to save costs and improve performance.