N400 : Cost Accounting : Assessment Answers

Furthermore, the company has been on the forefront in offering employment opportunities to different people in the residential economies. The company today operates in approximately seventeen countries globally. The company has managed to employ a total of approximately 14,000 people who are responsible for serving thousands of customers across the globe. The popularity of the firm is defined by its greatest brands on the market. Some of the BlueScope's strong steel brands under which partnership venturing has been successful across the globe include but not limited to COLORBOND®, LYSAGHT®, and ZINCALUME® steels. Other brands include the engineered buildings such as the Butler® and Varco Pruden®.

Currently, BlueScope is an international leader in the manufacturing of painted and coated steel products. Additionally, the company is position one in the market regarding building and construction. The firm has not only a great potential but also strength in the manufacturing of engineered building materials in the market. The strategic focus of the company is to expand the market of premium painted and coated steel in areas such as North America, Asia Pacific, China, and Australia.

The best performing steel plant in the United States of America is the North Star BlueScope. The competitiveness of the plant is not limited to the northern sides of the US but one of the best plants in the world.  North Star BlueScope Steel has maintained consistency in financial performance and a substantial return on the invested capital. BlueScope is determined and more strategic to ensure high value in the steel making in both New Zealand and Australia. The company is determined to offer high-value products throughout the cycle. The fundamental strategy of the company is maintaining financial strength while creating a higher value for the investors. The company is also focused on enhancing the growth not only in the returns on invested capital but also the balance sheet entirely. The company is made up of a hierarchical organization structure. In this case, the company is led by Board directors and the Executive Leadership Team (Bluescope.com. 2018). Under the Board of directors, the panel is led by a chairman who is independent. From the chairman, we drop down the chain to the Managing director who is also the acting Chief Executive Officer before getting to the non-executive officers who are also independent. Following the Executive leadership team, we have the Managing Director and the CEO at the top position followed by the Chief Legal Officer and the Secretary before getting to the Executive General Manager of the people.

Value chain

The ideology sounds irrational to speak about the value chain of a company before exploiting the meaning of the term Value Chain. The term value chain refers to all the operations done by a company or any other business entity to add value to an article. Usually, the operations begin all away from the inputs to the production all along including the after sale operations. Therefore, the value chain is made up of five primary parameters. This components of the value chain include the outbound logistics, inbound logistics, sales, marketing, operation and service (Tarver, 2018). Inbound logistics are all input based activities like receiving, inventory control and warehousing (Christopher, 2016). Operations entail all the activities that lead to the conversion of the resources (inputs) into the final product. Outbound operations are value-adding operations that promote the transition and transportation of the final products to the respective clients (Zailani, Jeyaraman, Vengadasan, and Premkumar, 2012). Marketing and sales refer to the process of obtaining potential buyers for the purchase of the final products. Lastly, the service logistics relates to all the operations that thrive to improve the value of the product. A typical example of a service logistics activity is the customer services.

The five components of the value chain are fundamental for the competitive achievement of a company. While in need of improving the competitiveness of a company, all the parts of the value chain should be critically analyzed to identify the gaps which require development. Usually, the improvement of the value chain can boost the competitiveness of a company either minimizing the production cost or improving the production capacity.

Following the BlueScope Company as a steel manufacturing company, several concepts can be brought forth regarding the value chain analysis. The inbound logistics in the case of the BlueScope Company include activities such as obtaining of the relevant raw materials, stacking and reclaiming them and finally transitioning the materials to the respective departments.

Operations are also termed as production management as per the definition provided earlier. Operations in the case of BlueScope Company include processing and handling of the raw materials. The raw materials used by the company in the manufacturing of steel include boiler coal, iron, and the coking coal. The operations involved in such a case are crushing of the lump ore and screening, and making of divers’ products such as coke, pitch bonded magnesia bricks, sinter, lime, wire rods, iron production and rolls repairing. Other activities include the generation of chilled water, liquid nitrogen, oxygen and argon, gaseous argon, nitrogen and oxygen, steam and plant air.

Additionally, operations include the manufacturing of spare parts to cater the requirements of the plant, conducting the repair activities of the various units of the plant, and electronic equipment repair. Some of the electronic equipment in the steel manufacturing company include meters, control panel, and the PLCs. Finally, operations include planning, design, and monitoring of the production process.

Outbound logistics in the BlueScope Company include planning, controlling and directing the distribution and transportation of the steel to the respective customers. The activities also include the transportation of the steel products such as the iron sheets made in the company. Usually, the outbound logistics can be encompassed in the principal operations.

Marketing and sales activities in the BlueScope Company includes but not limited to the Controlling, planning, directing and organization of the prices, placement, products, domestic sales and promotions in the business environment (Terho, Haas, Eggert, and Ulaga, 2012). Some of the typical examples of the domestic sales, in this case, includes but not limited to the retail, actual and project sales (Acharyulu, Subbaiah, and Narayana, 2015, p.49). The marketing and sales activities also entail the management of the export sales of the special steel, legislation management and formulation of the prices of the byproducts.

After sale services in BlueScope company include commercial terms, post-sale contacts, and follow-ups, settlement of the after sale complains from the clients (Mitra, and Sebastian, 2014). The services also include product quality management. The after sale services can also be encompassed in the principal activities.

Planning Process

Planning is the fundamental role of any manager of a given company. Failure to perform effective planning may lead to failure of the business. Usually, a business plan is a written document that outlines the objectives of the company together with the courses of action of achieving the formulated goals. The planning process in the BlueScope Company follows the formal planning process documented by different pieces of pieces of literature on the internet. The steps below outline a step by step planning process of the company.

1. The study and analysis of the external and internal environment to take note of the available opportunities
2. The formulation of objectives
3. Conducting the preliminaries whereby the factors likely to affect the planning process are defined followed by possible solutions to the problems
4. Formulating a variety of courses of action for the achievement of the formulated objectives
5. Analysis of the formulated courses of action to pick the most appropriate alternative
6. Execution of the most appropriate course of action
7. Formulation of supportive courses of action to stabilize the main strategy
8. Evaluation process to find out the weaknesses of the plan while making the relevant corrections

Controlling

Controlling refers to the process of ensuring the actual operations of the business work in line with the expectations documented in the plan to achieve the desired objectives of the firm (iEduNote.com. (2018, p.1). Usually, the controlling process takes a three-step operation as illustrated below.

1. Setting the standards of the operations
2. Comparing the actual performance of the company against the set standards to realize the strengths and weaknesses presented
3. Executing a corrective mechanism against the gaps presented while maintaining the strengths.

Decision Making Process

Decision making refers to the identification of the best alternative from a diversity of choices (Dartmouth, U. 2018, p.1). The BlueScope Company employs a standard decision-making process to be competitive in the market.  The decision-making process employed by the company is formulated below.

1. Identification of the decision. In this case, the decision maker fully defines the decision he/she is interested in making.
2. Information gathering. In this case, the decision maker gathers the relevant information regarding the decision made. Information about the decision made can be found either externally in materials such as books, journals and on the internet or internally through self-assessment.
3. Identification of the alternatives regarding the decision made
4. Analysis of the decision made against the alternatives.
5. Selection of the best alternative
6. Execution process. This step entails putting the best alternative into action. This is also known as the implementation stage
7. Evaluation step. In this step, the results of the made decision are evaluated to find out the gaps which are tackled through action.

Management Accounting Information and Tools

Management accounting tools simply refer to the data recorded by the business concerning the accounting principles for decision making (Shpak, 2018, p.1). The accounting tools by BlueScope Company is the income statement and the balance sheet. The accounting information on the income statement is the total annual revenue, profit, and loss. On the other hand, the accounting information on the balance sheet is the total assets, liabilities and owners' equity. Following the latest fiscal year reporting, the company has a total revenue amounting to $11,497.8M which is an increase of 9% compared to the previous fiscal year. The company has a total net tangible asset per share amounting to &7.90 which is an increase of 30% compared to the previous fiscal year reporting. Finally, the company has a cash liability reporting of ($63.6M) which is a reduction by 127% compared to the previous fiscal year.

Recommendation and Conclusion

Just as it is in practice, I would recommend the company to use the income statement, balance sheet, and cash flow statement as the accounting tools in the business operations.  The major reason for the existence of the company is to increase profitability. It is therefore important for the company to tress its profitability level and take actions where necessary for the prosperity of the business operation. This ideology necessitates the importance of the profit and loss account.

Additionally, the total revenue presented on the income statement tells if the business is growing or not. It's also important to note the financial position of the business to avoid working blindly with a collapsing enterprise. A business is worthwhile if it's able to pay off all the liabilities on the balance sheet without venturing into individual incomes. Cash flow statement tells the liquidity of the business. A business can only be able to carry out daily operations if it has the adequate cash (cash inflow should be more than cash outflow).  Therefore, the profit and loss statement, Cash flow and the Balance Sheet are the recommended accounting tools for the business.

References:

Acharyulu, S.G., Subbaiah, K.V. and Narayana, K., 2015. Value Chain Model for Steel Manufacturing Sector: A Case Study. International Journal of Managing Value and Supply Chains (IJMVSC) Vol, 6, pp.45-53.

Bluescope.com. (2018). Executive Team - BlueScope Corporate. [online] Available at: https://www.bluescope.com/about-us/executive-team/ [Accessed 10 Sep. 2018].

Christopher, M., 2016. Logistics & supply chain management. Pearson UK.

Dartmouth, U. (2018). Decision-making process. [online] umassd.edu. Available at: https://www.umassd.edu/fycm/decisionmaking/process/ [Accessed 12 Sep. 2018].

iEduNote.com. (2018). What is Controlling? Importance of Controlling in Management. [online] Available at: https://iedunote.com/controlling [Accessed 12 Sep. 2018].

Mitra Debnath, R., and Sebastian, V.J., 2014. Efficiency in the Indian iron and steel industry–an application of data envelopment analysis. Journal of Advances in Management Research, 11(1), pp.4-19.

Shpak, S. (2018). Managerial Accounting Tools for Business Decision-Making. [online] Yourbusiness.azcentral.com. Available at: https://yourbusiness.azcentral.com/managerial-accounting-tools-business-decisionmaking-3325.html [Accessed 12 Sep. 2018].

Tarver, E. (2018). How does a strong value chain management team help a company? [online] Investopedia. Available at: https://www.investopedia.com/ask/answers/043015/how-does-strong-value-chain-management-team-help-company.asp [Accessed 12 Sep. 2018].

Terho, H., Haas, A., Eggert, A. and Ulaga, W., 2012. ‘It's almost like taking the sales out of selling’—towards a conceptualization of value-based selling in business markets. Industrial Marketing Management, 41(1), pp.174-185.

Zailani, S., Jeyaraman, K., Vengadasan, G. and Premkumar, R., 2012. Sustainable supply chain management (SSCM) in Malaysia: A survey. International Journal of Production Economics, 140(1), pp.330-340.