Cost Accounting and the Lean Production Philosophy

1221 Words Jan 11th, 2013 5 Pages
Cost accounting and the lean production philosophy


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 production. This essay will also describe the differences between managerial accounting and cost accounting.

There are many strategies that Dr. White could employed to adequately mitigate the negative impact of reduced budgetary allocations to
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This philosophy is now generally accepted as the ideal business model of the 21st century and replaces the mass production philosophy of the previous century. On the website Mr. Vadim Kotelnikov, Inventor of inspirational Business e-Coaching states that the lean production philosophy “is about doing more with less: less time, inventory, space, labor, and money. "Lean manufacturing", a shorthand for a commitment to eliminating waste, simplifying procedures and speeding up production (
At its very core, this philosophy employs a systematic approach to the elimination of waste in seven key areas. These areas could be summarized as eliminating overproduction and producing only what customers’ need; eliminating unnecessary delay, down or idle time; streamlining inventory processes to eliminate unnecessary purchasing and storing of raw materials; prevent over-processing by removing any unnecessary steps in processes or procedures; streamlining the motion/movement of people and equipment; eliminating transportation delays and unnecessary material handling and reducing defective products and the cost to repair/replace them (
As is obvious by now, there are clear differences between typical production process and the lean production model. Suited for the mass production strategy of the last century, the manufacturing cycle of the typical production process primarily engages in cost accounting whether periodic or

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