ISO and ABC: Complements or Competitors
International Journal of Logistics Management, Vol. 13, No. 2, pp. 91-100, 2002
14 Pages Posted: 24 Dec 2011
Date Written: December 31, 2002
Abstract
ISO 900 and Activity Based Costing (ABC) are two useful tools for logisticians. Both of these tools can support efforts to improve customer service and/or reduce total costs. Using survey and case study methods, we investigated whether these two techniques are implements together as complements, are kept separate, or are considered competitors for scarce resources (money, time and talent). The survey revealed that relatively few firms are using both ISO and ABC. Moreover, respondents from firms in which either ISO or ABC were implemented reported higher performance levels than those firms where both were used. Results of the case study suggested that practicing logisticians view ISO and ABC as separate initiatives. While the quality systems group led the charge to ISO registration, Finance and accounting implemented the ABC model. The case firm did little to exploit potentially complementary aspects of the two tools. Indeed, there is evidence that ABC and ISO 900 actually competed for managerial attention.
Keywords: ABC, Activity Based Costing, ISO, Quality Systems
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