Target setting for indirect processes: a new hybrid method for continuous improvement of indirect processes

Sebastian Ihrig, Alessio Ishizaka, Alwine Mohnen

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Abstract

Indirect processes are increasingly contributing to the total cost of production in highly competitive and technology-intensive industries. Unfortunately, they are less assessable than direct processes due to the complex organizational management structure. Therefore, companies seeking to make improvements in indirect areas need decision support methods to indicate which indirect process needs to be improved and to what extent. To facilitate this task, the target setting for indirect processes (TSIP) method has been developed following the constructive research approach. TSIP is a combination of process modelling, the analytic network process, activity-based management from managerial accounting research, and the value control chart from target costing research in a kaizen budgeting framework. This new hybrid method is developed and validated in cooperation with a global first-tier automotive supplier.
Original languageEnglish
Pages (from-to)220-231
JournalProduction Planning and Control
Volume28
Issue number3
Early online date13 Nov 2016
DOIs
Publication statusPublished - Mar 2017

Keywords

  • analytic network process
  • constructive research approach
  • continuous improvement
  • indirect processes
  • activity-based management

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