Companies may not know what they do not know

Cost structures are changing, due to

• Volume changes (economic impact or growth)
• Process improvement
• Across-the-board cuts
• Product mix changes
• Supply chain changes (upstream or downstream)

None of these are likely to be properly reflected by the existing standard cost system

• The update may not happen until the next fiscal year
• The update will contain cost distortion
• Improvements may stay hidden or even show in a negative way

In the meantime, decisions are made or required about

• Products & Customers – Where to focus?
• Pricing – Adding margin on standard cost will not win the quote
• Overhead support – what is really consuming which overhead?