The findings of the study revealed the existence of an important factor in the adoption of the ABC system in the Libyan cement environment, namely the compatibility between state laws and organisational policy. This factor is considered a unique factor in the adoption of the ABC system. To the knowledge of the researcher, this factor has not been referred to in any previous studies as one of the adoption factors of the ABC system.
Additionally, the study has proposed a strategic plan for the implementation of the ABC system which is represented in the six following phases:
Table 5.2: The proposed Strategic Plan for Implementation of the ABC system in the Libyan Cement Industry
The Phases
An Indication of What Each Phase
Incorporates
Establishing a Team
The first phase represents the establishment a multi- faceted team which includes members from within different departments and activities of the LCC or ACC, such as from finance, ICT, marketing, manufacturing and from other important areas of the company. The multi- faceted team should primarily include three to six people and their main role is designing the preliminaries of the ABC system model.
Determining Design Choices
Before the multi-faceted team start to design the ABC system they need to take six major questions into account and answer them. These six questions are:
• Is the ABC system going to be a single system or will it be assimilated with the prevailing system?
• Is there a need to formally design and approve the design before it is implemented?
• Which member of staff ought to take
responsibility for the “proprietorship” of the ABC design?
• What is the accuracy of the system going to be like?
• Does the system amass chronological costs or imminent costs or both?
• And, finally, should the design of the system be composite or simple?
In order for the ABC model to work effectively, there needs to be three sets of training programmes carried out; programmes for the administration, the implementers and Second phase
First Phase
Third phase
Training the users. For the ABC system to be successfully implemented in an organization, it firstly needs to be understood by the administration and, for this, effectual training needs to take place. The implementers comprise the multi-faceted team and, even though they represent their own heads of department, it is not likely that they will have complete knowledge of the ABC system prior to the team being assembled. Hence, they need to be taught about enterprise needs, software prototypes and project development. The entire workforce will use the ABC system output information and, for them to take efficient decisions, they firstly need to understand the system. Hence, training is a prerequisite for these people to make sure they understand the benefits of the system and comprehend them in their decision-making.
Collecting Information
To make sure that the ABC model is successfully implemented, the implementers primarily need to be confident about their collected information. The team should coordinate with management and collect vital, reliable and valid information to make sure that, before the ABC system is projected, the information used is actually correct.
Fourth phase
Constructing an ABC Model
To create an accurate ABC model, the multi-faceted team needs to assess the organization’s processes, resources, cost drivers, cost centres and activity centres. They then need to break them down and constitute them into flowcharts to comprehend the implication of cost distribution.
The team should firstly identify the activities involved in the manufacturing processes and break them down into categories, adding whatever activities are related to the prime headings under each category. Once this is done, the resources and costs used by these actions need to be derived and it is preferable that the cost drivers that demonstrate a cause-and-effect connection should be chosen when determining both resources and cost drivers.
Post-Implementation Evaluation
In this phase, the ABC system model needs to be evaluated after its implementation. Usually, hidden problems and interruptions occur and this stage helps in eliminating any problem that might surface and in making sure that the accumulated results are perfectly reliable.
From the outcomes ascertained by this research on the factors relating to the adoption of the ABC system in the Libya cement industry it is possible to suggest some recommendations to assist the administration of the Libyan cement companies in improving the accurate identification of the costs of production by adopting the ABC system (which will be reflected in the competitive price for the products). These recommendations will be presented in the concluding chapter which follows.
Fifth phase
Sixth Phase
Based on the research results, it can be stated that the main contributions to knowledge by this research are presented:
• In the development of an analytical framework for the adoption factors of the ABC system in the LCI,
• By the detection of the compatibility between state laws and organisational policy as a unique factor in the adoption of the ABC system and the
proposed strategic plan for implementation of ABC system in the LCI after this factor had been validated by conducting more face-to-face interviews with workers in the Libyan cement industry.
5.6 Chapter Summary
This chapter has presented the findings that have emerged from the data collected from the two case studies. Face-to-face interviews (as the main source) were supported by documentation and by the direct observations undertaken during the data-gathering exercise in order to enhance the validity of this research. Furthermore, this chapter discusses in detail the factors that should encourage the Libyan cement industry to adopt the activity-based costing system; these factors have emerged from the review of the literature and from the analysis of the findings from the two case studies.
Moreover, this chapter presents the validation of the analytical framework of the adoption factors of the ABC system in the LCI and the proposed strategic plan for the implementation of ABC system in the Libyan cement industry which was designed in the form of phases.
CHAPTER SIX
CONCLUSION AND RECOMMENDATIONS
6.0 Introduction
This chapter brings together the results, a discussion on the interviews, observations, and an analysis of the supporting documentation in order to draw conclusions on the methodology used and to identify the main results of the study. Chapter six also covers the objectives of the research and the overall aim as stated. As a result, recommendations will be made for the future development of the Libyan cement industry.