A comparative analysis of management accounting systems' impact on lean implementation.

Authors: Li, Xueping1 Sawhney, Rapinder1 Arendt, Eric John1 Ramasamy, Karuppuchamy2 Source: International Journal of Technology Management; 2012, Vol. 57 Issue 1, p33-48, 16p Document Type: Article Subject Terms: *LEAN manufacturing *COST accounting *MANAGERIAL accounting *MANUFACTURING processes *PRODUCTION control COMPARATIVE studies Author-Supplied Keywords: ABC activity-based costing lean accounting lean manufacturing management accounting systems MAS modelling net income simulation value stream costing VSC NAICS/Industry Codes : 334513 Instruments and Related Products Manufacturing for Measuring, Displaying, and Controlling Industrial Process Variables 333994 Industrial Process Furnace and Oven Manufacturing Abstract: Lean principles and practices have been widely adopted by many companies since the early 1990s. These companies are now beginning to realise that traditional costing and accounting methods may hinder the lean initiatives that they are implementing. This raises an important question: "Which cost management and accounting approaches best support the newly implemented lean principles and practices?" This paper examines the relative impact of three different management accounting systems on lean manufacturing implementation through simulation modelling with a single performance metric ? net income. Three management accounting alternatives included in this study: traditional management accounting (TMA), activity-based costing (ABC), and value stream costing (VSC). This study compares these three management accounting alternatives using process simulation and statistically designed experimental methods. The results

demonstrate that VSC appears to provide a bridge between operational views and financial views of lean, which enhances the transfer of information from shop level to management level. [ABSTRACT FROM AUTHOR] Copyright of International Journal of Technology Management is the property of Inderscience Enterprises Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.) Author Affiliations: 1 Department of Industrial and Information Engineering, University of Tennessee, 416 East Stadium Hall, Knoxville, TN 39776-0700, USA. 2 Department of Industrial and Information Engineering, University of Tennessee, 416 East Stadium Hall, Knoxville, TN 39776-0700, USA ISSN: 02675730 Accession Number: 67651800 Database: Business Source Complete