Logistics cost management in foundry production using the Activity – Based Costing method

The aim of the paper is to present the application of Activity-Based Costing (ABC) method in logistics cost management in foundry production and its practical use in differentiating logistics service levels. The study was carried out in a foundry specializing in custom and small batch production of castings. The implementation of the ABC method involved three key phases. Tools such as Pareto analysis and the Lorenz curve were used to analyse the customers, which enabled the classification of customers according to their contribution to profit. The main result of the research was the creation of a calculation formula allowing detailed allocation of logistics costs to individual activities. At the same time, the key benefits of the ABC method for logistics management of foundry production were identified. The method was also used to analyse customers, which led to differentiation of logistics service levels based on their economic benefits. The main benefit of the implementation of the ABC method was the accurate allocation of logistics costs to activities, which enabled a better understanding of the economic efficiency of logistics processes. However, the study was time and data intensive, with some of the data based on educated guesses, which may have affected the accuracy of the results. Moreover, the focus on custom foundry production limits the generalizability of the conclusions. However, the ABC method has opened up new opportunities for data automation and optimization of logistics processes through digital technology, which contributes to modernise logistics management in foundry production.