Original Date: 02/28/2000
Revision Date: 01/18/2007
Information : Activity Based Costing Tool
Crane Army Ammunition Activity used a Coopers & Lybrand activity based costing model as its tactical approach to identifying organizational processes which could be reviewed for improvement. This allowed the Activity to approach ISO-9002 certification and post-certification activities across all critical core business processes.
Crane Army Ammunition Activity (CAAA) set a strategic goal of becoming ISO-9002 certified to enhance its competitive edge. Beginning in July 1997, CAAA leaders and organizational members decided to begin the process of meeting the International requirements for ISO-9002 certification. In March 1998, Perry Johnson Registrars, Inc. performed an initial certification visit at CAAA. CAAA became ISO-9002 registered in the Manufacture, Storage, Demolition and Shipment of Ammunition and Related Components in October of the same year.
Notably, CAAA utilized a Coopers & Lybrand activity based costing (ABC) model as its tactical approach to identifying organizational processes which could be reviewed for improvement. This allowed CAAA to approach certification and post-certification activities across all critical core business processes. More specifically, ABC data helped CAAA review critical ISO-9002 elements. CAAA has built a strong internal ISO-9002 knowledge base, with 10 trained ISO-9000 lead auditors and 18 ISO-9000 auditors to maintain the edge it achieved through certification. While the goal has been to gain work, the benefits have spilled over into improved product quality and morale, reduced costs, and a work uniformity that creates a more organized work site and organization. Reaching for and obtaining ISO certification has caused CAAA to establish a more refined approach to documentation, which has led to an improved ability to find and correct process glitches.
CAAA’s quality program also includes statistical process control (SPC) training and implementation as part of its focused plan. The ISO-9000 auditor training positions CAAA well for continued registration by having an internal core body of knowledge from which to leverage. Along with auditors, the lessons learned from the ABC model will continue to improve processes in readiness for the ISO-2000 Program. As the ISO-2000 Program nears, it will include performance metrics and the demonstration of process improvement as requirements. CAAA has built a strong foundation to continue ISO recertification efforts, integrating these new requirements more easily into its approach to the ISO-9002 program.
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