How Weyerhaeuser manages corporate overhead costs

Article Abstract:

Weyerhaeuser Co uses a 'charge-back' system to identify and manage activities that contribute indirect corporate costs, giving company managers decision rights over resource consumption. Weyerhaeuser's method is similar to strategic cost management used in factories, extending it to corporate headquarters overhead. Identifying and charging users for overhead activities promotes clear identification of users with service demand; allows line and staff groups enhanced understanding of the nature of services provided and their related costs; and promotes team-building between staff groups and the business units which they back. Senior management vision and staying power are required for successful management of corporate overhead, as well as staff flexibility. Weyerhaeuser's main activities are the growth and harvest of timber, and the manufacture and distribution of forest, pulp, and paper products.

Case studies, Finance, Corporations

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Quality management at Weyerhaeuser

Article Abstract:

The Weyerhaeuser Co's quality management system has four components including leadership, customer needs, and processes. The emphasis on leadership entails changes in traditional management styles from the status quo to an orientation of continuous improvement and working closely and harmoniously with suppliers. The satisfaction of customer needs is predicated on the five-step customer-in system, which includes: discovering customer requirements; translating, communicating, and deploying corporate resources in order to satisfy customers; and measuring customer satisfaction. Processes management entails the delivery of quality work and is based on four components, including: measurable inputs; value added activities; and measurable outputs. Managerial accountants are important to quality management in that they are oriented towards process management.

Analysis, WY

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Deming's message for management accountants

Article Abstract:

Quality management expert W. Edwards Deming advocates a transformation in management thinking if US businesses are to improve their competitiveness. American managers 'manage by the numbers,' promoting competition among employees and among suppliers so that the company's accounting objectives can be met. According to Deming, this win/lose competition is counterproductive. It fosters fear and quashes joy in work, learning and innovation. US firms would do better to encourage win/win cooperation to improve and expand the opportunities not only of workers and employees, but also of customers and society in general. Management accountants can contribute in promoting the kind of management thinking Deming advocates by taking an active role in the creation of information systems that focus on processes and customer satisfaction.

Practice, Influence, Deming, W. Edwards

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