Activity-based management in a small company: a case study

This paper deals with the application of activitybased management (ABM) in a small company. The project took place in G. E. Mustill, a company that produces machines for the photo framing industry. This project aims to develop an ABM system for the company which leads to appropriate improvement actions based on a make or buy decision about di€ erent parts of the machine, f̀our-head foiler’. Firstly, a theoretical framework for the design of an ABM system is developed. Then, secondly it is used to improve the business performance of four-head foiler manufacturing. The activities required to manufacture this machine are identi® ed and then quanti® ed by their consumption of resources. The factors causing or driving the cost (cost driver) of an activity in question have been identi® ed and used to identify the value-adding and non-valueadding activities. Also, some suggestions are o€ ered to improve the performance of the company using the ABM system.