Management Accounting Control System Essay Research Paper

Management Accounting Control System Essay, Research Paper

CM3223Management Accounting

Week 10b ?V Emerging Issues in Management Accounting

World class manufacturing

World class manufacturing can be taken to have four key elements.

?h The achievement of 100% quality

?h Just-in-time manufacturing

?h Managing people (multi-skilling, teamwork, empowerment)

?h Customer responsiveness (knowing their requirements, supplying on time and responding to changes in needs)

Dedicated cell production

??Cellular?? manufacturing involves a U-shaped flow along which are arranged a number of different machines that are used to make products with similar machining requirements. The machines are operated by multi-skilled workers who can drill, saw, paint, or whatever, as required.

This approach combines the flexibility of the functional layout (general drilling department, general sawing department and so on) with the speed and productivity of product-based layouts, where each type of product has its own dedicated machines.

Dedicated cell production may help to save costs in a number of ways.

?h Lower stocks of finished goods, meaning lower holding costs and opportunities for alternative uses of space

?h Rapid response to changes in demand (preserving goodwill)

?h Reduced material- and equipment-handling costs

?h Reduced staff numbers and high motivation

?h Reduced maintenance costs (multi-skilled workers can do it in idle moments)

?h Less scrap if linked to a training/TQM programme

Advanced manufacturing technology (AMT)

AMT is an expression encompassing, in general, the following.

?h Computer-aided design (CAD)

?h Computer-aided manufacturing (CAM)

?R Robots

?R Computer numerical control (CNC) machines

?R Automated guided vehicles (AGV)

?R Automated storage and retrieval systems (ASRS)

?h Flexible manufacturing systems (FMS)

?h Advances in production management

?R Materials requirement planning (MRP I)

?R Manufacturing resource planning (MRP II)

?R Optimised production technology (OPT)

?R Just-in-time (JIT)

?h Total quality management (TQM)

Organising workflows

JIT is a technique for the organisation of work flows to allow rapid, high quality, flexible production whilst minimising manufacturing waste and stock levels

?h Just-in-time production is production driven by demand for finished goods: each component is produced only when needed for the next stage

?h Just-in-time purchasing is matching receipt of material closely with usage

JIT and dedicated cell production go hand in hand: you might see these ideas going collectively under the heading ??lean manufacturing??.

Stock control

The traditional EOQ approach to stock control attempts to determine an optimal level of stock taking into account demand (d) in the period, ordering costs (c) and stock holding costs (h).

?h The EOQ formula is

EOQ = ?}2cd

h

?h This approach assumes that some stock holding is inevitable, and that demand and holding costs are constant and can be readily forecast

The JIT approach to stock control is quite different in that it aims not to hold stocks at all. Materials are purchased only at the time when they are needed. This requires short lead times (that is, quick delivery) and excellent relations with suppliers.

EOQ v JIT

?h EOQ (or a less complex traditional approach) is most suitable for businesses which need to be able to deliver their finished goods or services extremely quickly after an order is placed and which cannot easily predict demand (such as hospitals and emergency services)

?h JIT would be particularly appropriate for, say, a jobbing firm producing specialised machines to order

?h Most businesses that do not need to be able to deliver instanteneously should be able to operate JIT to some extent, so long as reliable suppliers can be found

Benefits and costs of JIT

The benefits should be starting to sound familiar.

?h Flexibility?h Quick response to demand

?h Product variety?h Stockless production

?h Empowerment?h Fast set-ups

?h Frees up space?h High quality/less scrap

However, there are drawbacks.

?h Suppliers are likely to want to charge a premium price for guaranteed quality and time of delivery

?h The reliability of suppliers needs to be thoroughly checked

?h Production planning may be more difficult (and more expensive to administer) because it will need to be more precise

?h Production quickly grinds to a halt if suppliers default

Implications for MAIS

There will be no need for an elaborate cost accounting system of stores requisitions, materials transfer notes and so on.

?h A system to provide non-financial performance measures (such as % of quality control rejects) will be required

?h A system for EDI with customers and suppliers will be needed

?h Cost collection procedures can be simplified (for example, backflush accounting could be introduced)

?h Traditional varianc

Внимание, отключите Adblock

Вы посетили наш сайт со включенным блокировщиком рекламы!
Ссылка для скачивания станет доступной сразу после отключения Adblock!

Скачать