Bread Producer Cuts Costs by 3.4 Percent Through Activity-Based Management

Natalia Sihombing S.Pd Kamis, Juni 11, 2026
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FORMOSA NEWS

CV Feljen Jaya (Sedap Jaya), a bread manufacturing company based in Manado, Indonesia, has demonstrated how Activity-Based Management (ABM) can improve production cost efficiency. The finding comes from a 2026 study conducted by Citra Salniati Mallisa, Jenny Morasa, and Fanda D.P. Rundengan from Universitas Sam Ratulangi. The research revealed that the company could save approximately IDR 36.6 million annually by eliminating activities that do not add value to its products.

As competition in the food manufacturing industry continues to intensify, operational efficiency has become a critical factor for business sustainability. Many manufacturing companies still rely on traditional cost management systems that focus primarily on total expenditures without identifying which activities genuinely contribute value to customers. This often results in hidden operational inefficiencies and unnecessary costs.

The researchers examined the entire bread production process at CV Feljen Jaya (Sedap Jaya), from raw material inspection to product distribution. Conducted from September 2025 onward, the study involved direct observations, interviews with company management and employees, and a detailed analysis of production activities.

Using the Activity-Based Management approach, the researchers classified production activities into two categories: value-added activities, which directly contribute to product quality and customer satisfaction, and non-value-added activities, which consume resources without increasing the product’s value.

The study identified 15 major activities within the company’s bread production process. Most activities, including dough mixing, fermentation, shaping, filling, baking, packaging, and distribution, were categorized as value-added because they directly influence product quality and consumer satisfaction.

However, the researchers found that bread package labeling was a non-value-added activity. Although labeling is necessary for regulatory compliance and product information purposes, it does not improve the bread’s taste, quality, functionality, or physical characteristics from the customer’s perspective.

Key Findings

  • Total production costs in 2024 reached IDR 1.074 billion.
  • Bread package labeling cost the company IDR 36.6 million per year.
  • Labeling was identified as the only non-value-added activity in the production process.
  • Integrating labeling into the packaging stage or using direct printing on packaging could eliminate these additional costs.
  • The implementation of Activity-Based Management generated 3.40 percent cost efficiency.

After applying the ABM model, the company’s total production costs decreased from IDR 1,074,300,000 to IDR 1,037,700,000, resulting in annual savings of IDR 36,600,000.

According to Citra Salniati Mallisa and her colleagues from Universitas Sam Ratulangi, identifying non-value-added activities enables companies to allocate resources more effectively. Employees previously assigned to labeling tasks could be redirected to packaging or other productive activities, thereby increasing operational efficiency without compromising product quality.

The findings highlight that modern cost management approaches are not limited to large corporations. Small and medium-sized enterprises (SMEs), particularly those operating in the food and beverage sector, can also benefit significantly from Activity-Based Management by reducing waste, improving productivity, and strengthening their competitiveness.

Beyond financial savings, the implementation of ABM can help businesses establish more systematic operational procedures, improve cost monitoring, and support data-driven decision-making. As a result, companies can maintain product quality while controlling production expenses more effectively.

Author Profile

  • Citra Salniati Mallisa is a researcher from the Faculty of Economics and Business at Universitas Sam Ratulangi, specializing in management accounting and operational cost efficiency.
  • Jenny Morasa is a lecturer and academic at Universitas Sam Ratulangi with expertise in management accounting, cost control, and accounting information systems.
  • Fanda D.P. Rundengan is an academic and researcher at Universitas Sam Ratulangi whose work focuses on accounting, cost management, and organizational performance improvement.

Research Source

Natalia Sihombing S.Pd

Diposting oleh Natalia Sihombing S.Pd

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