As the world is moving toward optimized production strategies, third-world
countries are also putting their efforts into contributing to this smart
manufacturing approach. However, despite realizing the impact of its global
significance and reduction in financial overheads, most of the third-world
potential industries are hesitant to this transformation. The predominant
reasons are huge capital investments and the cost of handling technology. In
this study, a cost calculation methodology is recognized that analyze the cost
benefits of technological investment. The case shows that the adaptation of
Industry 4.0 is more economical than the traditional manufacturing approach. In
an existing setup, a traditional TDABC is being applied, where cost id resources
such as labor and material are included in a product cost at the end. This
approach losses the visibility of associated labor and material cost used for
the particular activity giving an offset in a product cost. Therefore, it is
highly necessary to improve this traditional methodology by measuring and
analyzing activities for every resource consumed. The methodology used in this
study is advantageous, easy to implement, and maps the strategy that can be
commonly utilized for any manufacturing activity to gain a competitive advantage
in an entire value chain of Industry 4.0. In this study, a modified real-time
application costing tool, time-driven activity-based costing (TDABC), is
proposed. A comparative analysis of existing and proposed TDABC is performed.
The outcomes of this study signify the adaptation of digital manufacturing for
higher productivity, a reduced amount of operational budget, and efficient
utilization of resources.