Check your TCM score

Wondering how your cost measurement / management system works? The attributes listed in this checklist help to answer that question.

On a scale of 1 to 5, rate your existing cost system:
1 = Poor 2 = Fair 3 = Good 4 = Very good 5 = Excellent

Quiz

1. Our cost information system makes available historical, current actual, and simulated future cost information. (Should cost, would cost, could cost)

2. We use our cost information system to support ongoing improvement in all functional areas. (resource efficiency, wastage reduction, yield improvement, productivity improvement etc).

3. Our strategic planning process (annual business plan exercise) makes use of existing cost information.

4. Our cost information / management system is realistic and reliable. (data confirmation, bid process etc)

5. Our executive team relies on our cost system to inform their decision making. (Supports key decision making like make or buy, right product portfolio, product discount policy etc).

6. We use our cost system to help realign resources when our business priorities change. (capital reallocation, plant flexibility, handling business cyclicality)

7. Our cost system regularly warns us when unhealthy financial thresholds are approaching. (red flagging through early warning systems for product losses, non-recovery of inflation indexed costs, high process costs)

8. Our cost system provides timely reporting, and its data is easy to access. (leadership dashboards, IT enabled MIS)

9. We use our cost system to hold individuals and groups accountable for reasonable performance standards. (assessing value chain efficiency, vendor efficiency, procurement efficiency, production excellence and product pricing algorithms, customer delivery models.)

10. We use our cost system to analyze discrete points of profitability such as customer, product, and region.

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