JC GIBBONS: Leveraging Activity-Based Costing to Support Efficiency & Expansion
MMTC has been an incredible partner for over two decades, helping us pinpoint profit centers, evaluate performance, and make data-driven decisions that have made us a stronger, more competitive business. They continue to be an invaluable resource for Michigan manufacturers looking to grow and succeed.
-- Jeff Gibbons, President
JC Gibbons Manufacturing Inc. (www.jcgibbons.com) provides custom Swiss, CNC and Screw Machining services to customers in the U.S. and Canada. From their 22,000 square foot machine shop in Livonia, Mich. with 24 employees, they specialize in the low and high-volume production of small and large parts for the automotive, defense, plumbing, aerospace, HVAC, oil and gas, electrical and alternative energy industries.
Challenge
JC Gibbons has partnered with MMTC for years to implement an Activity-Based Costing (ABC) model to better understand their costing processes. With recent investments in new equipment that improved throughput, operational efficiency, and on-time delivery, along with other operational changes, the company needed to update its ABC model to accurately reflect current operations and support ongoing initiatives.
Solution
To stay competitive and aligned with current economic conditions, JC Gibbons turned to MMTC for support. An MMTC costing specialist worked onsite for three days, starting with a collaborative session to review operational changes. The specialist then analyzed depreciation schedules, maintenance accounts, machine utilization, quoting templates, and performance metrics. This process helped JC Gibbons identify work cells that were not profitable and take steps to address them. The company also established a framework for ongoing assessment to continuously evaluate operations and drive improvement. As a result, JC Gibbons gained a clearer understanding of its costing data, improved quoting accuracy, reduced costing errors, and learned to fully leverage the ABC model for more informed business decisions.
Results
- Increased Sales: 10%
- Cost Savings: $75,000