Lean Vs. Lean Manufacturing Industry

Lean operations emphasizes the understanding of the customer by producing units only as they are needed. As individual units are manufactured this reduces inventory drastically. This also would reduce any waste of products created and not sold. Both of these processes would have been a benefit to my company as there were several units of certain brands that were not desirable or meeting customer needs. This caused a loss of revenue by having units that were produced but not sold. The lean operations and Just In Time methods would eliminate this problem from the manufacturing side of my company.

The advantages of lean operations are that they cut costs, save time, and are easy to monitor. The disadvantages are difficult implementation.

The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.

Overall, the purpose of lean is to improve processes. Lean is not a methodology that seeks for the reduction of costs, even though it might appear as a result of a great implementation of Lean. Neither is a methodology to improve productivity, as it might require to do more work that do not necessarily means that the staff is doing the right things. Lastly, Lean is not about restructuring the work the staff do, as it might simply mean changing activities without considering if they are actually value added or not.

One of the main issues when it comes to implementing lean accounting is that it exposes many things throughout a business and with this reveal comes potential changes that may alter the way a business incorporates its manufacturing process. When a company implements lean accounting into the daily business activities, the business is setting themselves up for success to evaluate the way it does business and identify potential activities that they can reduce in an effort to eliminate unwanted expenses and maximize on profits. However, having this much information when it comes to every aspect of the business may turn out to actually be a downfall in the business as a whole because when a company implements lean accounting they may see some needed

Process costing is an easier system to use when costing homogenous products compared to other cost allocation methods. Each process applies direct materials, labor and manufacturing overhead to the production cost total. Management accountants take the total number of goods leaving the process and divide the total process cost by this number. This creates a simple average cost for each item produced. Another advantage is that business owners use process costing because it creates a flexible production process. Companies needing to refine their process can simply add or remove a process as necessary. This also allows companies to lower their production cost for each good. Adding a process allows companies to produce slightly different goods or improve product quality. This flexibility ensures companies can produce at the most competitive cost in the economic marketplace. Also process costing provides an approach to allocate costs to

This paper provides a critical analysis of several alternative cost systems to traditional cost accounting systems. It then evaluates these alternatives in terms of how they might support, or not, companies that adopt a lean philosophy. An example of nonfinancial performance indicators that support a lean philosophy is offered in Tables 1 and 2. This discussion in the article

With this costing technique , a Manager can easily determine if there is a weak link in production chain by keeping an eye on the cost per unit each day. Using the accounting programs involved in process costing, a manager can figure out where in the process the item 's per unit cost is going up. This way a single manager or a team of managers can monitor millions of units being produced without needing to check on each department unless a problem comes up. By the same token, these numbers need to be watched diligently, as a change of even a fraction of a cent can cost thousands of dollars quite quickly.

Lean is defines the manufacturing philosophy that reduces the time between the shipping and customer demand, which based on the systematic method by eliminating waste, that means giving the customer what they want when they want it, and don 't waste whatever. Rahmana, Sharif and Esa (2013) suggested lean production is mentioned to improve the company 's performance from the philosophy in reducing waste in order. That means, lean system destination is the decrease cost by removing the non-value activities, which they are applying a category of tools and techniques for checking and eliminating defective in the production process. In the Evenort Company should emulate the five overriding principles of lean thinking in terms of implementing lean that there is guarantee the company has been driving correctly in the lean manufacturing (Cardiff 2015) as can show in table 1.

When inventories are low and under good control, the valuation of inventory becomes much less complex. Lean Accounting contains a number of methods for valuing inventory that are simple, accurate and often visual. Several of these methods do not require any computer-based inventory tracking at all.

The operational systems of organizations can be viewed as open systems, which interact with their respective environments on a continuous basis. In this context, these systems comprise synergetic and interdependent subsystems of input, process and output with the main objective of these systems being to efficiently and effectively deliver goods and/or services to their demanding customers (Yasin and Wafa, 2002). Confronting the challenges of global competition, companies have to reduce costs, improve quality, and meet their customers’ ever-changing needs (Canel et al., 2000). Even though lean techniques were developed for the manufacturing firms and

Lean principles can help organizations improve profitability through improved cycle times, productivity and quality, by removing waste from work processes and systems. The resulting reduction in waste also leads to reductions in operating costs. But Lean was born in the manufacturing world. So some of the core concepts pertain to assembly-line set-ups and still use that language (work-in-process inventory, flow cells, kanban-based pull systems, etc.).

Lean accounting is the common term used for changes important to a company’s accounting, organizing, measurement and executive processes to keep up lean manufacturing and lean thinking. There are two main purposes for Lean accounting .The first is the utilization of lean methods to the company’s accounting control, and measurement processes. This is same than applying lean methods to some other processes. The goal is to eliminate waste, free up limit, speed up the procedure, wipe out mistakes and defects, and make the procedure clear and understandable. The second purposes of lean accounting is to on a very basic level change the accounting, control, and measurement forms so they motivate lean change and improvement, give data that is suitable for control and decision-making give a understanding of customer worth, effectively survey the financial impact of lean improvement, and are themselves simple, visual, and law-waste.Based on (Maskell andKennedy 2007), the objectives of lean accounting are simple and have 4 objectives, 1. provide accurate, timely, and reasonable information to motivate lean transformation throughout the organization, and for decision making leading to expanded customer value, development, profitability, and income; 2. Use lean

The core objection behind lean systems is to maximize customer value while minimizing waste. Basically, lean is defined by using fewer resources in order to make a perfect value for customers. How lean systems work, they use a highly skilled workforce and flexible equipment in order to make some advantages. Such as mass production which is the high volume and low unit cost. And craft production which is the variety and flexibility, this will help eliminate waste for the producer and consumer. Luckily, this approach has drawn attention to other services. For example, lean systems aren’t only suitable for manufactures but also health cares, offices and shipping and delivery. The misconception that lean is a tactic or cost reduction program is not necessarily true, but it is a process of thinking and acting for the entire company. In order to accomplish lean system thinking changes must refrain from management optimize separate technologies, assets and vertical departments.

The Activity Based mostly Costing, known as ABC in Accounting also, is a new way towards a far more thorough and good allocation of costs. It alters the original way of allocating costs that was based through enough time the machines are in work or within an operation. The lean Structured Costing, on the other side, is dependent on each