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Chapter 16 Lean Accounting

Lean manufacturing aims to maximize customer value while eliminating waste. It identifies five key principles: specifying value by product, identifying and streamlining value streams, making value flow continuously, allowing customers to pull value, and pursuing perfection. Value streams map all the steps required to deliver a product or service to a customer, identifying value-added and non-value added activities. The goal is to eliminate waste and optimize value flow through approaches like manufacturing cells that group related operations.

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Pratita Garnis Ariantika
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134 views

Chapter 16 Lean Accounting

Lean manufacturing aims to maximize customer value while eliminating waste. It identifies five key principles: specifying value by product, identifying and streamlining value streams, making value flow continuously, allowing customers to pull value, and pursuing perfection. Value streams map all the steps required to deliver a product or service to a customer, identifying value-added and non-value added activities. The goal is to eliminate waste and optimize value flow through approaches like manufacturing cells that group related operations.

Uploaded by

Pratita Garnis Ariantika
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Chapter 16 Lean Accounting, Target Costing, and Balanced Scorecard

Learning Objective 1. Describe the basic features of lean manufacturing.

Lean Manufacturing is an approach designed to eliminate waste and maximize customer value. Lean
manufacturing adds value by reducing waste. Successful implementation of lean manufacturing has
brought about significant improvements, such as better quality, increased productivity, reduced lead
times, major reductions in inventories, reduced setup times, lower manufacturing costs, and increased
production rates.

There are dimensions of lean manufacturing consist of delivering the right product and a cost reduction
strategy that redefines activities performed. Delivering the right product must be accompanied right
quantity, right quality (zero defect), at time needed, and at lowest possible cost.

Lean manufacturing is distinguished by the following five principles of lean thinking:


• Precisely specify value by each particular product.
• Identify the “value stream” for each.
• Make value flow without interruption.
• Let the customer pull value from the producer.
• Pursue perfection

Value by Product is when only value added features should be produced; non-value-added activities
should be eliminated.

Value Stream is all activities, both value-added and non-value-added, required to bring product group or
service from starting point to finished product in hands of customer. There are two types of value
stream consist of order fulfillment and new product. Value stream activities contain non-value-added
and value added. Non-value-added activities are the source of waste. They are of two types: (1)
activities avoidable in the short run and (2) activities unavoidable in the short run due to current
technology or production methods.

Order fulfillment value stream provides current products to current customers.

Value Flow changes the tradition manufacturing setup for batches to a cellular approach in order to
reduce setup time and reduce changeover time. Analyze the value flow will allow management to
identify ‘wastes’. Activities included in the first type are activities that can be eliminated very quickly,
while the second type requires more time and effort.
Manufacturing Cell is contains all operations in close proximity that are needed to produce a family of
products.

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