Supply chain management and activity-based costing: Current status and directions for the future

Purpose – The purpose of this paper is to summarize and analyze what is known regarding activity-based costing (ABC) applications in the context of supply chain management (SCM). We present a reference framework for practical implications and areas for future research in intra-firm and inter-organizational environments.

Design/methodology/approach – The findings underlie a systematic review methodology. Research gaps and guidance for further publications are derived from the reference framework based on ABC and SCM literature.

Findings – The review illustrates four main areas for further research: (i) determination of the role of management accounting in SCM (including supply chain finance), (ii) integration of time-driven ABC with radio frequency identification (RFID) technology and automatic data collection, (iii) analysis of inter-organizational management tools in supply chains in multiple negotiation rounds, and (iv) standardization of cost accounting data in supply chains.

Practical implications – The review provides practitioners with three main recommendations: (i) ABC applications require a solid data basis, organizational readiness, commitment from senior management, and an ABC management philosophy, (ii) open book accounting for inter-organizational cost information-sharing purposes needs institutional arrangements and economic incentive systems, and (iii) sharing costs and benefits among supply chain members requires a change of managers’ mind-set.

Originality/value – This paper reveals practical implications and provides new directions for research based on the reference framework. The paper contributes to the interdisciplinary topic between SCM and management accounting by providing a structured overview of 87 peer-reviewed articles from 1992 to 2016.

Keywords Systematic literature review, Supply chain costing, Supply chain finance, Inter-organizational cost management
Paper type Literature review