Unit or Standard Costing How and why MBRC moved from traditional payroll/timesheet costing to costing using asset management principles.
Problems with timesheet based costing 1. 2. 3. 4. Poor business/approval process flow Manual and resource intensive Wrong anyway Not future proof
Approaches 1. Moved Operation/maintenance activities to electronic work order and maintenance schedules. 2. Establish auto-pay arrangements 3. E-timesheets for exception payroll processing 4. Allowance simplification using the Modern Award and EBA process
Work Orders All asset maintenance and operational activities are performed using an asset management system work order • Costs “set” in the system as componentised resources which are allocated to work orders as utilised. • Resources based on “standard” or unit rates
Asset Maintenance Schedules Huge roll out job • Proactive maintenance functions are scheduled • Work orders produced based on scheduled activities
Asset Maintenance defect collection Found problems are identified as a defect and prioritised using a framework developed in-house • Work orders produced by maintenance crews to rectify defects • Defects investigated around capital works projects and rectified during the project
Capital Project costs Same approach as asset maintenance by employing work orders but with more detailed and accurate (employee level) resource allocation due to capitalisation requirements.
Auto-Pay expansion All employees now have their standard fortnight set in the payroll system and when they work to this standard then no processing of time and attendance required.
E-timesheets Introduced electronic timesheets and approval workflows to improve processing of auto-pay exceptions.
Allowances Utilised the Modern Award industry allowance and EBA process to negotiate higher industry allowance and elimination of many allowances – now far fewer exceptions recording required.
Implementation • Organisational buy-in required to move engineers to standard costing methods • Better management of work loads as transparency introduced via work order management • Patience and empathy required to introduce computerisation to our field staff.
Outcome • Future true activity management • As opposed to measuring the cost of our inputs, we are now moving towards managing the costs of our inputs in order to measure the cost of our output. • Transparency of works performed
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