MSS402030A
Apply cost factors to work practices

This unit of competency covers the skills and knowledge required by an individual to identify cost components in their work and to be able to determine, in general terms, the cost impacts of alternative actions.

Application

This unit applies to an individual who is required to contribute to, and be involved in, the assessment of cost factors in their work. This may be done individually or in a team environment.

The unit covers the skills to be able to assess the relative costs of the alternatives and use this as one of the key factors in making decisions. Decisions are made within the scope of the employee's authority and according to procedures. Typical decisions include those that contribute to the efficient organisation of own work and the improvement of production time and cycle times.

This unit requires the application of skills associated with problem solving to identify cost factors and cost implications of own work and self-management to apply cost-effective practices.


Prerequisites

Not applicable.


Elements and Performance Criteria

1

Identify the major cost components of product or process in own work area

1.1

Identify cost components in the product or process in own work area

1.2

Recognise the impact of current or alternative actions on costs

2

Identify constraints to cost-efficiency

2.1

Identify required production/process rate and major costs

2.2

Identify costs factors under individual or team control

2.3

Relate identified costs factors to impact on overall cost of production/process

2.4

Identify cost factors that are a constraint to cost-efficiency in own work area

3

Apply cost-efficient work practices

3.1

Identify and explain to relevant people the implications of possible actions/changes to improve cost-efficiency in simple financial terms

3.2

Identify non-financial implications of proposed changes in discussion with relevant people

3.3

Select actions which minimise overall costs

3.4

Monitor actions to ensure cost-efficiency in own work area is maintained

Required Skills

Required skills

Required skills include:

communicating with others to clarify cost factors and contribute suggestions for improvement

visualising normal operational procedures in terms of flow

distinguishing between fixed and variable costs

identifying fixed and variable cost components relevant to own work, including where applicable:

power/energy

materials, plant and equipment

production or process time, including impact on salary and wages

office expenses

government taxes and charges

Required knowledge

Required knowledge includes:

cost components of products made

costs concepts, such as expense and income

major cost contributors to product (e.g. energy)

the difference between internally and externally controlled costs

difference between overhead, labour and consumables

Evidence Required

The evidence guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Critical aspects for assessment and evidence required to demonstrate competency in this unit

A person who demonstrates competency in this unit must be able to provide evidence of the ability to:

identify the scope of their own and their teams work and relate it to the overall flow of work in the organisation

express cost factors in specific terms (e.g. cost per item, process and task) and not just in a general manner

identify and express costs factors in simple financial terms

use cost factors to select lower cost alternatives when making decisions.

Context of and specific resources for assessment

Assessment of performance must be undertaken in a workplace using or implementing one or more competitive systems and practices.

Access may be required to:

workplace procedures and plans relevant to work area

specifications and documentation relating to planned, currently being implemented, or implemented changes to work processes and procedures relevant to the assessee

documentation and information in relation to production, waste, overheads and hazard control/management

reports from supervisors/managers

case studies and scenarios to assess responses to contingencies.

Method of assessment

A holistic approach should be taken to the assessment.

Competence in this unit may be assessed by using a combination of the following to generate evidence:

demonstration in the workplace

workplace projects

suitable simulation

case studies/scenarios (particularly for assessment of contingencies, improvement scenarios, and so on)

targeted questioning

reports from supervisors, peers and colleagues (third-party reports)

portfolio of evidence.

In all cases it is expected that practical assessment will be combined with targeted questioning to assess underpinning knowledge.

Where applicable, reasonable adjustment must be made to work environments and training situations to accommodate ethnicity, age, gender, demographics and disability.

Guidance information for assessment

Assessment processes and techniques must be culturally appropriate and appropriate to the oracy, language and literacy capacity of the candidate and the work being performed.


Range Statement

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Competitive systems and practices

Competitive systems and practices may include, but are not limited to:

lean operations

agile operations

preventative and predictive maintenance approaches

monitoring and data gathering systems, such as Systems Control and Data Acquisition (SCADA) software, Enterprise Resource Planning (ERP) systems, Materials Resource Planning (MRP) and proprietary systems

statistical process control systems, including six sigma and three sigma

Just in Time (JIT), kanban and other pull-related operations control systems

supply, value, and demand chain monitoring and analysis

5S

continuous improvement (kaizen)

breakthrough improvement (kaizen blitz)

cause/effect diagrams

overall equipment effectiveness (OEE)

takt time

process mapping

problem solving

run charts

standard procedures

current reality tree

Competitive systems and practices should be interpreted so as to take into account:

the stage of implementation of competitive systems and practices

the size of the enterprise

the work organisation, culture, regulatory environment and the industry sector

Cost components

Cost components include:

fixed and variable costs, such as power/energy, materials, plant and equipment, production or process time, including impact on salary and wages

office expenses, such as telephone

government taxes and charges

Process

Process may include:

a production, maintenance, logistics, office or other support process in an organisation

Overall cost

Overall cost may include:

the assessment of negative and positive financial implications

negative long-term issues, such as occupational health and safety (OHS), environmental and regulatory issues


Sectors

Unit sector

Competitive systems and practices


Employability Skills

This unit contains employability skills.


Licensing Information

Not applicable.