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Lean manufacturing: costing the value stream

Patxi Ruiz‐de‐Arbulo‐Lopez (Department of Business Management, University of the Basque Country (UPV/EHU), Bilbao, Spain)
Jordi Fortuny‐Santos (Department of Business Management, Universitat Politecnica de Catalunya (Technical University of Catalonia), Manresa, Spain)
Lluís Cuatrecasas‐Arbós (Department of Business Management, Universitat Politecnica de Catalunya (Technical University of Catalonia), Manresa, Spain)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 17 May 2013

10018

Abstract

Purpose

The purpose of this paper is to identify the shortcomings of traditional cost accounting techniques in lean companies and then it seeks to analyse the validity and convenience of value stream costing (VSC) as a tool in a company that has adopted some concepts of lean manufacturing.

Design/methodology/approach

The paper reviews the relevant literature in order to discuss the deficiencies of costing methods in lean manufacturing. It evaluates the requirements of VSC and provides a concrete illustration of VSC in the continuous improvement process of a point of sales terminal assembly line.

Findings

The paper evidences the possible mistakes of cost accounting. The necessity and validity of VSC in lean manufacturing are presented, followed by a case example. In order to make continuous improvement decisions, VSM, VSC and box score offer complete information on the performance of the value stream.

Research limitations/implications

Although accompanied by an application on a real case study, this is not an empirical investigation on the adoption of VSC.

Practical implications

VSC requirements agree with the fundamentals of lean management. Therefore, VSC is a valid tool for lean companies, although the applicability depends on the maturity of the lean implementation.

Originality/value

This paper contributes to the lean accounting literature because the management accounting literature still lags behind the lean transformation. This is one of the first papers on VSC in relevant journals and the first one to combine VSC and box scores with value stream mapping. The paper will be useful to academics involved in new accounting systems but also to practitioners who are implementing lean manufacturing.

Keywords

Citation

Ruiz‐de‐Arbulo‐Lopez, P., Fortuny‐Santos, J. and Cuatrecasas‐Arbós, L. (2013), "Lean manufacturing: costing the value stream", Industrial Management & Data Systems, Vol. 113 No. 5, pp. 647-668. https://doi.org/10.1108/02635571311324124

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited

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