Colgate- Palmolive is one of the leading consumer product organizations that have been dealing its products in worldwide. Colgate- Palmolive is an America based company and has many branches all over the world. One of the branches is located in Malaysia. Colgate- Palmolive (M) Sdn Bhd focusing their product segment on toothpaste and toothbrush. Both products are very competitive presently in Malaysia market. At the present, Colgate is implementing Activity-Based Costing (ABC) method. ABC is a system had been practices in many organizations for being a tool to measures the cost and performance of the activities and the cost objects. Hence, the management should look into ABC system which uses to provide more accurate information for decision making in determining costs by cost object such as product, customer, and location and the cost pool of the company.
2.0 Keys Areas for Improvement
According to Reuben Mark (2003), Colgate Palmolive has highlighted its strategy of developing and launching innovative new products globally continues to strengthen the company’s market leadership positions around the world. Hence, it does apply to Colgate Palmolive Malaysia. Indeed the implementation of activity based costing by Colgate Palmolive (M) provide information for achieving its plans since the ABC is costing technology that traces cost to products according to activities perform on them. Accurate cost information is produced as to such purposes; focusing company strategy, designing products to increase customer value, and continuously improving activities on the operation throughout the company (Peter, 1989). In general, the ABC system cover such following area of activities including product design and processes, storage of raw materials, set up of machinery to ensure a smooth flow in the production line, machine operating time as well as cleaning of machine after each production.
Product design is crucially for Colgate Palmolive (M) to