Editor’s note: This is an excerpt from the new book, Innovating Lean Six Sigma, by Kimberly Watson-Hemphill and Kristine Nissen Bradley.

I have discussed the economics of project management numerous times in presentations all over the country, and based on the response to my message, I have to conclude that many people just don’t get it.

T here are three ways in which a standard costing system is typically used in a manufacturing company:

1. Performance measurement
2. Decision making
3. Inventory valuation