Article

 

ABC in metal industry: A tool for gaining competitive advantage (p.47-59)

by

Ioannis Kafetzidakis, Hellenic Open University

Athanassios Mihiotis, Hellenic Open University

Keywords : Competitive advantage, Activity based costing, Metal industry, Supply chain

JEL classification : M1

Abstract

In todays’ global competition environment, supply chain management (SCM) is considered to be a really crucial tool for managers helping them to optimize performance of enterprises. This paper examines the level of adoption of SCM strategies and particularly the activity based costing strategy in a large Greek metal industry. Metal industries have special characteristics that differentiate them strongly from the other type of industries especially due to the big life cycle of the products they produce, the fact that the companies are high capital-intensive and finally due to their global excess production. This means that the low cost of SCM is without doubt a basic prerequisite for a company aiming to acquire a competitive advantage. Current study first dentifies the level of adoption of activity based costing in a big exporting greek metal industry, then valuates the contribution of the strategy to the supply chain management and the performance of the organization and finally focuses on the weaknesses of the Activity Based Costing (ABC) model suggesting specific strategic choices for the gain of competitive advantage which is proved to be a key component to enhance productivity, performance and profitability.