Author(s): Angela Tidwell
ACME Steel United States (ASUS) currently uses a simple method of evaluating SKU level performance, Activity Based Margin. The activity component is only considering the variation in the amount of warehouse residence time and impact on cost/margin. All of the other components use a standard costing methodology. Product data is collected from multiple processing plants within the corporation’s U.S. operations. Randomly sampled products are used to apply leading practices. This paper evaluates leading practices, and determines whether the current method should be changed and/or include other factors. The results support using SKU profiling by velocity for monitoring and proactively evaluating SKU level performance over what is currently used, resulting in a significant cost savings