Accounting for Intangibles in Integrated Manufacturing Systems
Information Strategy: The Executive Journal, Summer 1990

BY ROBERT PUTRUS, PE, CMC, CFE

Manufacturing executives should view computer-integrated manufacturing (CIM) as strategic support for their companies critical success factors, not as a point solution justified exclusively through Cash flow analysis.CIM's tangible benefits, such as inventory savings and less scrap are easily recognized and quantified by current accounting techniques.But most CIM benefits, such as faster introduction of new products, are intangible and can advance manufacturers business objectives. The non-financial justification method, based on the analytical hierarchy process (AHP), helps rank CIM benefits and risks by promoting users to build a decision models reflecting corporate business goals, define and weight criteria, and compare manufacturing options to reach CIM procurement decisions.