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17th Annual Conference of the International Group for Lean Construction - Taipei, Taiwan - 2009

Supply Chain Costs Analysis Using Activity-Based Costing: Case Study in Rebar Supply

Yong-Woo Kim¹ & Jinwoo Bae²

¹Yong-Woo Kim, Assistant Professor, College of Built Environment, Department of Construction Management, University of Washington, Seattle, WA. E-mail: [email protected]
²Jinwoo Bae, Ph.D. Students, Construction Management Program, Department of Civil Engineering, University of Washington, Seattle, WA. E-mail: [email protected]

Abstract

The activity-based costing method was used to compute rebar supply chain costs. This paper describes the model developed, the calculated costs, and sensitivity analysis results, followed by the relatedness to lean principles. Many literatures and consulting companies discuss how to reduce total costs in supply chain. But the first question to improve supply chain profitability should be to understand where the costs are spent in your supply chain and where the opportunity for improving your profits exists. Many opportunities to reduce total cost in supply chains, which are responsible for unnecessary overhead costs. The activity-based costing method was used to develop supply chain costing model. This paper discusses the benefits of activity-based costing in supply chain costs using a case study in rebar supply chain. This paper contributes to the knowledge of lean construction domain in that the activity-based costing method is adopted in supply chain costing so that stakeholders can make use of the ABC costing data to reduce total supply chain costs to achieve the project objective, not their internal production objectives.

Keywords

Supply chain costs; rebar supply; activity-based costing

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