Activity based management helps the organisation in controlling
its activities properly,which inturn results in enhancement of
performance and there by becoming more customer-centric.
Advantages of Activity Based Management:
- It reduces wastage, improves quality(process), shorter lead
time, and markets the product faster.
- It can be applied to all type of
organisations/enterprises.
- It can be divided into a number of activities which are
assessed using cost benefit analysis.
Disadvantages of Activity Based Management:
- As some activities have implicit values,they wont be
immediately identifiable as a financial added value.
- A good work place cannot add value in operational Activity
Based Management.
- A customer who doesnt produce profit,can provide better
prospects, though the ABM identifies him to be a low value
customer.