News & Events

Warehouse Activity Based Costing (ABC)

By Karen Stone (National Payroll Manager Pacific Brands Limited)

Growing demands by customers for value-added services such as labelling requirements, special packaging and smaller order sizes are all areas that can increase our costs of supply.

By associating cost to activities our DC managers can determine where costs are being incurred and what is initiating the costs.

The MyWorkplace (MWP) system used by PBIS Payroll to capture time & calculate payments for 3,000 hourly paid employees, has provided the Nunawading DC a more efficient and accurate means to record hours worked per activity per person. 

Previously data was recorded manually by line managers, keyed into a spreadsheet and reconciled by an administrator, then summarised for input into the ABC  system.

Employees now use scanners to register as they move between activities & reports are generated via the MWP system. The accuracy of the data being captured has also increased.

Holeproof DC Manager Kelly Holman, is pleased with the success of the project and it is viewed as a pilot for other DCs. Kelly now has data highlighting opportunities for productivity improvements and assisting with determination of resources/demand ratios.

Further development is being reviewed whereby the labour hours and work centres could be matched to the handling unit information now provided in Cognos cubes. This supports Benchmarking of activities between our DCs enabling sharing of Brands Best Practice.