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    Lean Accounting and Waste

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    Please response to question one in 250 words and question two in 150 words

    1. Lean manufacturing processes, such as Six Sigma or Kaizen, are popular because they reduce waste, thereby increasing profits. Still, accountants face several issues when switching to a lean manufacturing system. To begin, read the article The Lowdown on Lean Accounting and describe some of the issues accountants face when switching to a lean manufacturing system. Also identify some of the ways lean manufacturing reduces scrap, waste, and spoilage and how the accounting in these companies reflects the increased vigilance in preventing scrap, waste, and spoilage. Are there any downsides to enacting lean manufacturing from an accounting standpoint? If so, describe them.

    2. Reflect on the advantages and disadvantages of accounting in a lean manufacturing environment, as described

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    Solution Preview

    1. Some of the issues that accountants face when switching to a lean manufacturing are that lean accounting does not replace, complement or supplement management accounting. Also, lean accounting does not directly support decision making and enterprise optimization at the organizational level. It supports only at the shop floor level. Further, without a change in culture the change to lean accounting is meaningless. To free resources, or to increase the product value to customer, senior management must change their thinking. This is difficult. Lean Accounting means task based information, compiling cost-based data, complete overhaul of the accounting system, new information collection and measuring procedures, new software, and controls. The increase in accounting scope means overhaul of the system. There must be training of other personnel as well as of accounting personnel. The ...

    Solution Summary

    Issues relating to lean accounting are explained in a structured manner in this response. The answer includes references used.

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