APICS and IMA Report: Working Together to Enhance Supply Chain Management with Better Costing Practices

In this paper by Raef Lawson, Ph.D., CMA, CSCA, CPA, CFA, IMA vice president Research & Policy and Professor-in-Residence, and the Association for Supply Chain Management (APICS), upper management supply chain professionals were canvassed about ways of improving costing systems. IMA’s Strategic Cost Management Task Force, whose mission is to educate professionals on the benefits of improved costing systems, developed the questionnaire.

Key findings include:

• Overall, costing systems are perceived as being somewhat useful; however, for some areas, there was substantial discontent.
• The most commonly cited barrier to improving costing systems was lack of operational data or information (44% of respondents).
• Only one-third of respondents rely heavily on information provided by the finance staff when making business decisions.
• There is slight agreement that the accounting and finance staff (A&F) are responsive to requests for specific cost information, but there is a perception that A&F are too focused on external financial reporting.

Root causes include:  

• Overreliance on external financial reporting systems
• Outdated costing models
• Resistance to change by A&F  

The solution lies with top management who must demand accountants adopt more progressive, decision-focused costing practices.