Article: A Case Study of Management Accounting Evolution in the World-Class Manufacturing Community Journal: Journal of Business and Management (JBM) 1997 Vol.5 No.1 pp.35 - 51 Abstract: Just as individual manufacturing cells strive for continuous improvement, reduced setup times, and elimination of nonvalue-added activities, the accounting organizations within the eight Shingo manufacturers examined in this study have been able to accomplish corresponding objectives by eliminating accounting wastes such as unnecessary transaction processing, excessive paper handling, unnecessary reports, outdated controls and procedures, and excessive historical analyses. Additional results from this field study suggest that reductions in manufacturing cycle times, changes to cellular manufacturing, and the implementation of JIT systems have reduced the need for much of the detailed transaction processing associated with tracking work-in-process inventories. As a result, accountants must re-evaluate the benefits of traditional costing measurements in light of modern manufacturing processes. Furthermore, accountants must be careful that the tracking of internal transactions and the measurement of resource utilization are not creating perverse incentives or perpetuating barriers to continuous improvement within the organization. Finally, the study findings suggest that accountants must develop methods to measure the prospective financial impact of employee actions. Inderscience Publishers - linking academia, business and industry through research

Title: A Case Study of Management Accounting Evolution in the World-Class Manufacturing Community

Authors: Richard L. Jensen; Clifford R. Skousen; James W. Backner

Addresses: Author address listing can be found in the "About the Authors" section at the end of the article.

Abstract: Just as individual manufacturing cells strive for continuous improvement, reduced setup times, and elimination of nonvalue-added activities, the accounting organizations within the eight Shingo manufacturers examined in this study have been able to accomplish corresponding objectives by eliminating accounting wastes such as unnecessary transaction processing, excessive paper handling, unnecessary reports, outdated controls and procedures, and excessive historical analyses. Additional results from this field study suggest that reductions in manufacturing cycle times, changes to cellular manufacturing, and the implementation of JIT systems have reduced the need for much of the detailed transaction processing associated with tracking work-in-process inventories. As a result, accountants must re-evaluate the benefits of traditional costing measurements in light of modern manufacturing processes. Furthermore, accountants must be careful that the tracking of internal transactions and the measurement of resource utilization are not creating perverse incentives or perpetuating barriers to continuous improvement within the organization. Finally, the study findings suggest that accountants must develop methods to measure the prospective financial impact of employee actions.

Keywords: Management accounting; manufacturing evolution; JIT systems; costing measurements; internal transactions; financial impact.

DOI: 10.1504/JBM.1997.141036

Journal of Business and Management, 1997 Vol.5 No.1, pp.35 - 51

Published online: 05 Sep 2024 *

Title: A Case Study of Management Accounting Evolution in the World-Class Manufacturing Community

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