What is activity-based management primarily focused on?

Activity-based management (ABM) primarily focuses on managing activities in an organization to eliminate waste and enhance efficiency. This approach stems from activity-based costing systems, which identify various activities within an organization and assign costs to those activities based on their usage of resources. The goal of ABM is to analyze these activities to determine which add value to the customer and which do not, ultimately guiding decision-making that leads to improved processes, product quality, and customer satisfaction.

By concentrating on eliminating waste, ABM helps organizations streamline operations and better allocate resources. This means focusing on activities that contribute to value creation while minimizing or completely removing those that do not benefit the business or its customers, thus creating a more efficient operation. Therefore, the focus on eliminating waste is fundamental to the principles of ABM, ensuring that all activities align with the company's overall strategy and customer needs.