Costing Case

COSTING FOR PRESSURE DIE CASTING OPERATIONS – An Activity Based Perspective

Introduction

Die casting is a versatile process for producing engineered metal parts by forcing molten metal under high pressure into reusable steel molds. These molds, called dies, can be designed to produce complex shapes with a high degree of accuracy and repeatability. Parts can be sharply defined, with smooth or textured surfaces, and are suitable for a wide variety of attractive and serviceable finishes.

Die castings are among the highest volume, mass-produced items manufactured by the metalworking industry, and they can be found in thousands of consumer, commercial and industrial products. Die cast parts are important components of products ranging from automobiles to toys

The purpose of this article is to highlight the potential insights that the Top Management and Operational teams can gain from adopting an ACTIVITY BASED APPROACH to costing of Pressure die casting operations. The article is based on a live implementation of ABC at a leading auto ancillary unit at Chennai. (Referred to as Company X in the article) by the author & his team.

The case study would dwell into the following aspects:

1. A brief overview of the company & the industry in which it is operating

2. The ground situation that led the company towards consideration of ABC

3. The groundwork that was required prior to implementation

4. The actual implementation & aspects that were taken into consideration

5. The benefits realized post implementation

6. Scope for further refinements & the potential benefits consequent to pursuing the same

INDUSTRY BACKGROUND

The Indian auto component industry is one of India's sunrise industries with tremendous growth prospects. From a low-key supplier providing components to the domestic market alone, the industry has emerged as one of the key auto components centres in Asia and is today seen as a significant player in the global automotive supply...