Applying ERP and MES to implement the IFRS 8 operating segments: A steel group's activity-based standard costing production decision model

Wen Hsien Tsai, Shu Hui Lan, Hsiu Li Lee

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

The purpose of this paper is to create a smart operating roadmap, which shows the entire process of a strategic business plan, including functions, methods, and tools, to link IFRS 8 (International Financial Reporting Standards No.8) to ABSC (Activity-Based Standard Costing), and to integrate ERP (Enterprise Resource Planning), MES (Manufacturing Execution System) under an Industry 4.0 environment. The IFRS is a global accounting framework that provides high-quality global accounting standards and governance principles for companies. Using the ABSC production decision model can support the Chief Operating Decision Maker (CODM) in planning Product-Business Unit (Product-BU) organization, which complies with the definition of the IFRS8 operating segments. The case study of the steel group uses the organizational design of the ERP system to achieve the systematization of reportable segments financial statements. In this process, the mathematical programing methods and ABSC can be used to obtain the optimal solutions for sales, costs, and profits. An international steel group case is used to demonstrate how to apply the methodology proposed in this paper for operating planning and control. The sensitivity analysis on the carbon emission reduction goal of environmental sustainability is also presented for the steel group case.

Original languageEnglish
Article number4303
JournalSustainability (Switzerland)
Volume12
Issue number10
DOIs
StatePublished - 1 May 2020

Keywords

  • Activity-based costing (ABC)
  • Activity-based standard costing (ABSC)
  • Business unit (BU)
  • Carbon emission reduction
  • Chief operating decision maker (CODM)
  • Cyber-physical systems (CPS)
  • Enterprise resource planning (ERP)
  • Environmental sustainability
  • IFRS 8 operating segments (IFRS 8)
  • International financial reporting standards (IFRS)
  • Internet of things (IoT)
  • Manufacturing execution system (MES)

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