Applying modern accounting techniques in complex manufacturing

Abstract

Purpose

The purpose of this paper is to analyze the applicability of lean accounting and throughput accounting in a company with considerable investments in advanced manufacturing technology (AMT).

Design/methodology/approach

The paper compares lean accounting and throughput accounting with the traditional accounting system the company is using today. The authors investigate the differences between the three alternative approaches and use a case study approach to illustrate the effects of applying different modern accounting approaches in a complex manufacturing setting.

Findings

Pair-wise comparisons of the three approaches provide some interesting cost information as to the role of bottlenecks and value streams.

Research limitations/implications

The specific results of this study are limited to the case company, but can hopefully contribute to further research on how to combine lean and throughput accounting for mixed manufacturing environments, involving both value streams and bottlenecks.

Practical implications

Lean and throughput accounting provide other perspectives on cost information to traditional accounting, and can therefore be used in combination. The authors identify some issues and challenges involved in using lean accounting and throughput accounting in an AMT company.

Originality/value

This paper contributes with a comparison of traditional, lean, and throughput accounting in a specific industrial setting characterized by AMT and complex manufacturing.

Citation

Myrelid, A. and Olhager, J. (2015), "Applying modern accounting techniques in complex manufacturing", Industrial Management & Data Systems, Vol. 115 No. 3, pp. 402-418. https://doi.org/10.1108/IMDS-09-2014-0250