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development costs, tested reliability and performance, and substantially shorter product cycles.
Advances in Commercial Manufacturing
To evaluate advances in commercial manufacturing and identify those with potential for meeting the needs of defense manufacturing, the committee reviewed forward-looking manufacturing studies, including Next Generation Manufacturing (NGM, 1997) and Visionary Manufacturing Challenges for 2020 (NRC, 1998). In addition, the committee reviewed information sources available on the World Wide Web (see Appendix B) and invited speakers to assess advances anticipated in manufacturing. The committee then identified the following areas of management and technology advances that defense manufacturing can expect to draw on:
industry collaboration
adaptive enterprises
high-performance organizations
life-cycle perspectives
advanced manufacturing processing technology
environmentally compatible manufacturing
shared information environments
These advances are interactive, rather than being independent of each other (i.e., shared information environments may support the goals of high-performance organizations and adaptive enterprises may promote industry collaboration). Each of these advances is composed of a number of elements, which may also be applicable to other areas. These elements are summarized in Table 3–1 and described below.
Advanced Approaches to Manufacturing Accounting
Activity-Based Accounting
In activity-based, or process-based, accounting, costs are assigned to the actual activity or process in which they occur. In conventional systems, average costs are allocated per product. Total product costs are the same in both approaches, but, in the conventional system, it is impossible to assess cost drivers. The disadvantage of changing to activity-based accounting is the effort involved in revamping existing systems.
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