Cost Allocation at Furnutire Industry

HNI Corporation is the second-largest office furniture manufacturer in the world, and the nation's leading manufacturer and marketer of gas- and wood-burning fireplaces. HNI Corporation engages in the design, manufacture, and marketing of a range of office furniture and hearth products. It offers storage products, including vertical files, lateral files, pedestals, and high density filing; seating products comprising task chairs, executive desk chairs, conference/training chairs, and side chairs; office systems consisting of modular and moveable workspaces with integrated work surfaces, space dividers, and lighting; and desks and related products, including tables, bookcases, and credenzas. The company's hearth products include wood- and gas-burning factory-built fireplaces; pellet and electric hearth appliances; fireplace inserts; stoves; gas logs; and accessories. HNI distributes products through a network of independent office furniture dealers, office products dealers, wholesalers, and retailers. It operates primarily in the United States, Canada, Mexico, China, and Taiwan. The company was founded in 1944 and is headquartered in Muscatine, Iowa.

The main goal of my internship was to develop a common methodology for allocating costs from the plant level to the factory level - to promote better understanding of financial results and how they are influenced. This would involve understanding of how assets are utilized and the nature of fixed and variable costs. The focus was on the three HON Muscatine plants, which is why there are two mentors identified in each of the three plants in Muscatine. The end deliverable was a factory financial statement or scorecard. Additionally, a template was created that could be used in the other HON plants.

Strategically this internship allows Best Total Cost metrics to be viewed at the factory level, promoting a stronger linkage between goals and actual performance. During the internship I had an access to current plant financial statement; access to factories (observation of work cell structures and asset usage), Internet access; computer access; access to mentors for guidance.

During my internship, Brian Bedard, Operation Manager, Brad Steely, Factory Manager, Bart Andrews, Factory Manager, Christine Cole, Plant Manager, Alice Ganzly, Plant Controller, Jerry bacon, Plant Controller helped me and supported me.

My project was initially focused on creating a model to use for the cost allocation of three plants. And also supporting documents were provided with the generated Excel files.

The initial project was the cost allocation of the three HON Plants to factory level. Each cost allocation methodology was checked by the plant controllers and discussed with factory managers to increase the project efficiency. And also allocation summary and input priority table were made available to use to speed up the adaptation procedure. In order to keep allocation accountable, each methodology was rooted down to the manufacturing level. Jennifer Kakert, HON Controller was my advisor.

During my internship, my communication skills were greatly improved. And I also found the chance to understand how finance department contributes to the corporate success. Mr. Kakert leads me without pointing the direction. Each cell structure was analyzed by me. She also showed me the importance of social network which was very valuable when I tried to get precious information. This project didn't have to have correct answer however reliable and commonly agreed resolution was achievable. Therefore Jennifer made me understand both sides of issues and come up with optimum solution. The shift away from being controlled by data-driven standards (former allocation) toward understanding the factory characteristics requires being proactive rather than reactive. Jennifer guided me throughout these challenges. During my internship the atmosphere was openly supportive.

During my internship, I would like to get involved into lean management implementation. I barely saw lean production activities. However my mentors enlightened me toward this area. Since I specialize on finance I would also experience how the finance department manage the working capital and evaluate the acquisition and allocation of financial resources.

There is no mistake proofing in a dynamic business environment. Therefore learning from mistakes and shoulder the responsibilities are crucial to be accountable. HNI Aggressive Profit Growth strategy and its unique organizational structure requires intense mental power to understand the root causes and the whys. It was an exceptional experience to me to see the team work. Coomunication is the most effective conflict resolution technique than the skimming the number an making an educational guess. Cost allocation requires interviewing the people in the factory. Therefore this information flow doesn't give you a big picture until you put whatever you have so far on your paper.

The most exciting part of my internship was realizing that every plant has different needs. The ideal internship program is a "win-win" situation for both sides, students and employer. The employer will appreciate the intern's contribution to the quality of service provided. The intern will benefit from the unique opportunity to gain valuable experience and knowledge in his/her field of interestand to develop and demonstrate the leadership. My internship has been a very valuable and win-win type intern. My personal and professional growth was fostered through the proper balance of guidance and independence and the acceptance of responsibility. My engineering background was certainly helpful for analytical analysis. I rate my internship experience as an exceptional opportunity.

My project assignment was completed successful. The focus would be on the three HON Muscatine plants, which was why there were two mentors identified in each of the three plants in Muscatine. The end deliverable was the factory financial statement or scoreboard. Additionally, a template created that can be used in the other HON plants. Oak Steel cost allocation project end results are used in the RCI event. The financial statement and P/L is going to face some change. Oak Laminate was the second part of the project; plant controller started using the allocation methodology to have a better understanding on financial statement. Geneva was almost done. However due to the busy schedule of the factory and support department managers, some points remained blank. To support further cost allocation project and ease the analyzing "dark spot" table was created.

Jennifer Kakert and her knowledge enhanced my internship experience. The internship was highly beneficial. I used my analytical skills, which was coming from my engineering background and finance knowledge. My project