Activity-Based Management

CIOP sessions are conducted by a pool of faculties who also offer the other international certification programs. The typical faculties are having experience between 20 to 30 years in the domains of procurement and supply chain and have a wealth of industry and teaching experience. All of them have great passion for teaching and believes in continuous learning and sharing those learnings. The faculties also go through periodic trainings titled “Faculty Development Programs” to keep them abreast with the latest developments in supply chain and teaching methodologies. Basically, all the faculties are practitioners or consultants who work for the industry and teach supply chain during their spare time or execute this as a project.

Activity-Based Management (also known as productive change management) is a methodology of analyzing and identifying activities a company performs, with the use of activity-based costing to perform a re-engineering strategy or a bottom-up value stream analysis to improve overall strategic and operational objectives in an organisation. 

The key aim of activity-based management, according to some experts in the field, is to reduce cost while maintaining quality by identifying those activities that are most important to the company's success, as well as those activities which are most profitable to perform by an internal staff. This helps the company to align resources with the most productive operations within the given time frame, thereby, improving the quality and quantity of output. The resulting techniques allow an organisation to reallocate resources to achieve excellence in its different activity categories. Activities are also prioritised and monitored on the basis of their contribution towards the achievement of company goals and objectives.

Activities, then, become the drivers for generating financial and other outcomes, rather than simply providing a service. The main objective of activity-based management, therefore, is to achieve a balance between the two - maximizing profits without having to sacrifice quality. The value of activity analysis in activity-based management is in its ability to provide information essential for making strategic decisions. Most organisations perform an activity-based analysis for determining the most important and profitable activities for their businesses. However, some companies perform the activity-based management of their businesses on an individual basis.

Activity-Based Management uses activity-based costing techniques in order to establish the most productive and efficient procedures, systems, and people for a given business. It identifies and classifies the different activities performed by the business to identify drivers of productivity such as planning, production, and research and development. It then measures the level of efficiency of these activities through its use of activity-based costing techniques. In addition, it also applies the concept of cost objectives, which is the idea that an object's quality will determine its overall value. Cost-oriented activities are those that yield maximum returns in terms of dollar amount while quality-oriented activities are those that yield minimal return on investment (ROI) in relation to the resources expended in performing them.

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