Lean Accounting Essay - 1508 Words

Essay Question 1 What are the main benefits and challenges of implementing a lean accounting system in a lean manufacturing environment? Do you anticipate interest in lean accounting will grow, the methods will change, or the concepts will fade out and be replaced with another ‘flavor of the month’? How do you perceive lean principles affecting your career? Justify your answers. I. Lean Accounting Lean accounting often refers to more simplified accounting practices that focuses on eliminating waste, reducing production lead time, and producing products on customer demand. But Lean accounting does not stand alone. It is enabled by lean thinking and lean production methods. And lean accounting not only needs lean†¦show more content†¦In addition, companies can use the available time to cross-train employees and create them more skilled. 3. Chapter 7, â€Å"Managing by Value Stream†, Practical Lean Accounting. 4. SMA (2) _Lean Accounting, Decision Making, P23. III. Challenges of Implementing a Lean Accounting System in a Lean Manufacturing Environment Although there are more benefits from the implementation of lean accounting, the challenges do exist. There are always two sides to a thing. And we can’t avoid some challenges during the implementation process. 1. Senior Management Initiative This is the most critical part when implementing lean accounting in a lean manufacturing environment. Lean implementation across the company will not be successful if senior management is not fully committed. The same situation in Who’s Counting?, the company won’t achieve anything if the executives are not fully supportive. And there will be conflicts between different departments, because they are not on the same boat. 2. Short-term Profitability Companies may find out that there is no short-term financial improvement after implementing lean. And this causes comments such as: â€Å"We see wonderful results in operations, but they don’t show up in the financial statements. If lean is so great, why doesn’t it hit the bottom line?†5 So lean accounting faces with theShow MoreRelatedLean Accounting1428 Words   |  6 Pagestraditional accounting practices that the Topeka plant adopted in 1979 to support its mass production process have value in a lean environment? Explain the specific reasons that support your answer. In general, we do not think that traditional accounting practices that Topeka plant adopted in 1979 to support its mass production would fit into the lean accounting environment. The differences between the two accounting methods make the traditional accounting hard to work for the lean environment.Read MoreThe Objects of Lean Accounting1753 Words   |  7 PagesIntroduction Lean accounting was originally developed by Henry Ford in the early 1900’s. The main reason behind its development was to simplify the accounting process and remove excess waste that was involved. Henry Ford realized that lean thinking was needed not only for manufacturing goods but was also necessary in the financial and accounting departments of the company. There are two main objectives that lean accounting has: 1) To eliminate waste in manufacturing and accounting while freeingRead MoreIntroduction:. According To Brian Maskell, ‘Lean Accounting1243 Words   |  5 PagesIntroduction: According to Brian Maskell, ‘Lean Accounting is general term used for the changes required to company’s accounting, control measurement, and management processes to support lean manufacturing and lean thinking.’ Lean accounting is used as business strategy for Lean Enterprise. In future, the traditional accounting methods used by most of the companies will not be compatible with the Lean changes that companies making today. Lean Manufacturing focuses on eliminating non-value addedRead MoreCost Accounting and the Lean Production Philosophy1221 Words   |  5 PagesCost accounting and the lean production philosophy By Tyrone Williams AIU Online September1, 2012 Abstract As Dr. Stephanie White prepares to cope with the a steep reduction in the budgetary allocation to the Uptown Clinic she must carefully determine which areas to cut while striving to maintain current levels of service. This essay will offer advice Dr. White on preparing for budget cuts. It will also discuss the lean production philosophy and how this compares with typical productionRead MoreWausau Equipment Company Case Study Essay925 Words   |  4 Pageslot by introducing lean strategy. The management’s next step should be in making further Lean improvements. As we know, â€Å"SIMPA† is widely used in Lean process. â€Å"SIMPA† stands for Specify Value, Identify Value Stream, Make it Flow, Pull and Always Improving. These phases draw a big and long-term picture to lead a team logically from detecting the problems to solving the problems and make sure that the team can sustain the achievement and keep improving. In this case, the lean project was plannedRead MoreEssay on Lebanon Gasket1761 Words   |  8 PagesLebanon Gasket Company | October 24 2012 | | Creating a Lean Enterprise | CREATING A LEAN ENTERPRISE: THE CASE OF THE LEBANON GASKET COMPANY I. Summary of facts * Lebanon Gasket Company’s Topeka, Kansas Facility began operation in 1979. * The company had operated in using mass production. * In January of 2004 LGC had about 109 employees. * The LGC Topeka plant relies on two main manufacturing processes – injection molding and extrusionRead MoreSwot Analysis : Lean Manufacturing1892 Words   |  8 Pagescorrectly, lean manufacturing also known as lean thinking creates an atmosphere where competitive advantages and success is attainable. Due to the successful nature of this strategy, organizations other than manufacturing, have implemented lean thinking with a favorable outcome. Discussed below is the establishment of lean thinking, the steps of 5S, which is the tool utilized to lay the groundwork of lean thinking, and distinct differences between traditional cost accounting practices and lean accountingRead MoreExecutive Summary for Accounting622 Words   |  3 Pagesmanagement and lean accounting at Watlow Electric Manufacturing Company. Value stream management and lean accounting are designed to support lean manufacturing where value is defined from the customers perspective, work is organized by value s tream, supply flow is defined in terms of demand pull, and employees are empowered and focused on quality and continuous improvement. Rather than organizing by functional departments (i.e., the traditional approach associated with responsibility accounting), a companyRead MoreDescribe the Difference in Managerial Accounting vs. Cost Accounting1479 Words   |  6 PagesDescribe how managerial accounting is different from cost accounting. Cost accounting is the process of tracking, recording and analyzing costs associated with a company’s product or project. Internal managers are the ones who normally use cost accounting information. Direct Costs, Indirect Costs and Overhead/Absorbed Costs are usually what are measured in Cost Accounting. This information is then used by managers when decisions are made dealing with company costs and how to improve the profitRead MoreLean Vs. Lean Manufacturing Industry1049 Words   |  5 Pages Lean accountings primary use is in the manufacturing industry. A lean manufacturing company in which lean accounting is used looks to attack wastes in all forms. This in turn reduces the cost of goods sold. Lean accounting instead uses value stream costing. â€Å"Lean accounting experts believe that accounting itself can be lean, which can contribute to profit rather than just calculating it. Cost do not exist to be calculated. Costs exist to be reduced† (Taiichi Ohno). Lean accounting accentuates