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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.

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.

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.

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

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.

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.

The purpose of the paper is to perform a review and analyze the literature on lean accounting (LA) to develop insights into how LA research is developing, offering a critique of the research to date and underlining future research opportunities.

The research uses a structured literature review (SLR) to categorize and analyze 39 research articles from relevant journals with a publication date from 1996 to 2020 (September) and to answer three research questions.

Findings demonstrated that although LA seems to be the most suitable method for lean companies, it still lacks research in terms of the role of accountants in lean organizations as well as how its concepts are integrated with the generally accepted accounting principles (GAAP).

The paper provides both academics and practitioners with valuable insights regarding the role of management accounting and accountants in the pursuit of lean transformation, presenting meaningful themes and a complete analysis of the literature along with research gaps for future research.

The paper contributes to lean manufacturing literature by providing a comprehensive SLR of articles regarding LA. Also, the paper serves as a basis for developing future research agendas in management accounting practices for lean organizations.

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).

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.

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

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.

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.

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

Lean manufacturing (LM) has advocated gains by reducing waste and intensifying continuous improvement. As a holistic organizational policy, it must overpass the limits of the manufacturing function. Management accounting should be aligned to lean thinking, aiming to meet the demands and goals of a lean organization. This paper aims to investigate the degree of alignment between management accounting systems and LM practices.

Two representative case studies were carried out in industry leaders in the implementation of LM, in Brazil. The key research constructs and were identified by means of a systematic literature review. The rhetoric and practice concerning the alignment between management accounting and LM are discussed based on the existing theory and the conducted case studies.

The analysis showed that many of the principles that form the rhetoric of lean accounting are far from the accounting practices observed in the companies. Using the theory-building function of case studies, 10 propositions to be tested in future research are proposed. The main propositions are also summarized in a framework based on analogies with optical lenses.

To the best of the knowledge, there are no previous in-depth studies focusing on characterizing this alignment between management accounting and LM practices. The analysis yields prescriptive directions for managers that seek to improve this alignment in their business. This study also proposes a five-stage maturity model, which can be used by the managers to assess this alignment and to set goals for reaching more advanced levels of maturity.

Implementation of lean production introduces the problem of what kind of management accounting to use. The purpose of this paper is to analyse aberrations that are typically created when traditional accounting is used in a lean organisation. Furthermore, the purpose is to discuss whether activity‐based costing (ABC) and value stream accounting are suitable for lean production. These three accounting systems are compared under the particular conditions of a small‐to medium‐sized enterprise (SME) that is in an early stage of lean implementation.

The paper is based on a case study carried out within a SME illustrated by three examples. In the first and second examples the SME analyses how the introduction of improvements, by the means of lean production, can lead to cost product mistakes when traditional accounting calculations are used. The second example deals with a comparison benchmark between traditional accounting and ABC. The third example analyses value stream accounting as an alternative to ABC and discusses the implications and limits for the SME.

The results of the examples show first, the possible mistakes introduced by traditional accounting, and second, how the costing of a manufacturing lot varies when using traditional accounting and ABC. In addition, the results illustrate the interrelationships between lean production, ABC and value stream accounting. In particular, ABC seems to introduce some difficulties in terms of IT automation, and there are difficulties with value stream accounting because it requires a particular value stream‐based organisation not particularly suitable for this SME.

The generalisability of the research findings is limited because of the use of a case study within a SME in which lean production is in an early stage of application and has a particular flexible organisation. This implies a need for further studies on other SMEs in different organisational situations.

The implications are useful for SMEs that are implementing lean production and are thinking of a changeover from traditional accounting. The results can guide SMEs in the selection of the most effective accounting system considering particular factors such as the state of lean implementation, whether the organisation is value stream oriented or type of products manufactured.

The paper discusses for the first time the implications of ABC and in particular of Value Stream Accounting inside a SME that is implementing Lean Production.

The purpose of this paper is to address the impact of a multidivisional structure on the implementation of lean manufacturing. It investigates how the controls employed by the corporate level impact the local implementation of lean manufacturing.

The paper reports on case studies in three subsidiaries in different multidivisional organisations.

The paper finds that lean manufacturing can be severely constrained by the accounting-based controls which are commonly in place in a multidivisional structure. Depending on the degree of centralisation, subsidiaries may be restricted to implementing lean tools in a fragmented way, rather than acting according to a coherent set of principles.

Companies may have to accept that being part of a multidivisional organisation can imply that their lean implementation is more gradual and piecemeal than they prefer. The paper proposes several ways to mitigate the constraints that may arise from incompatibilities between accounting-based controls and lean controls.

This study contributes to the literature about external constraints on production innovations, such as lean manufacturing. It highlights how the organisational context creates local conditions that may be detrimental to the implementation of lean manufacturing.

Explores the role of the management accounting system in the process of adopting a complex manufacturing strategy, lean production. Finds, in a longitudinal field study, using the clinical methodology, that in order to change the management accounting system to support the adoption of lean production, traditional performance measures have to reach a certain threshold. An important way to create impetus for this change is to raise the level of the unit of analysis in the management accounting system, both horizontally and vertically. Finally, the management accounting system affects the process in three concurrent ways: technically, through its design; formally, through its role in the organization; and cognitively, through the way in which actors think about and use the management accounting system. Proposes that in order for the system to be congruent with lean production principles, all three of these perspectives need to be changed.

The purpose of this paper is to implement an integrated activity-based costing (ABC) and theory of constraints (TOC) approach to enhance decision making in a Lean company.

Based on the literature, this paper proposes an integrated ABC and TOC approach and applies it to a Lean plastic manufacturing company to improve its product-mix decision.

The results of the case study show that the current conventional product-mix decision used by the company and the proposed integrated approach can give significantly different results concerning the optimal product-mix and the associated bottlenecks. Moreover, the paper suggests that managers who implement Lean production without utilising a supportive management accounting system may experience disappointing financial results.

The validation of the suggested method is based on a single case study with an action research approach. For future research, the authors suggest the implementation of the approach in different industries.

Overall, the integration of ABC and TOC provides managers with an accurate, timely and reliable tool that can help in making decisions about pricing, production line development, process improvements and product-mix.

This paper contributes to Lean and management accounting literature by demonstrating the value of a method of integrating ABC and TOC. Also a case study is chosen for the empirical aspect of the study as there are no case studies available in the literature that illustrate a real life case of integrating ABC and TOC within Lean companies as an alternative to the current used cost accounting systems.

This paper aims to study the relations between lean operations, lean principles in finance functions and the roles of finance functions.

The paper uses structural equation modeling to analyze data from 408 different firms in the Danish production and services sectors. A dyadic approach is applied, as a sub-sample of 107 chief operating officers in the responding firms is used to investigate the construct validity, reliability and average deviation index of the instrument measuring the roles of finance functions.

The paper finds that lean-operation firms emphasize four different yet interdependent roles of finance functions. The paper also finds that lean operation leads to firms’ finance functions adopting lean principles.

This paper characterizes lean-operation firms as contextually ambidextrous to predict relations between lean operation and roles of finance functions. The paper expands prior case study findings on the roles of finance functions in lean-operation firms, and the findings of the paper underline that finance functions continue to play an important role in these firms.

Decision-makers in lean-operation firms should not be hesitant with respect to integrating finance function workers into the lean operation. Furthermore, decision-makers should understand that a balanced emphasis of the roles of finance functions is necessary to avoid overemphasizing exploitation at the expense of exploration, or vice versa.

To the best of the authors’ knowledge, this is the first paper to provide large-scale evidence of the roles of finance functions in lean-operation firms and to show that lean principles diffuse to finance functions. Furthermore, the paper introduces a new instrument for measuring finance function roles, based on the competing values framework.

An alignment between financial and operational measures is an essential element to capture the lean productivity improvements enabling supply chain sustainability. With the aim of supporting small and medium-sized enterprises (SMEs) in addressing corporate sustainability challenges, this study aims to examine the impact of leanness on supply chain sustainability, and the moderating role of sustainability control systems (SCS) on the relationship between leanness and supply chain sustainability.

Drawing on lean manufacturing and the levers of control framework, survey data was collected from 106 manufacturing SMEs in Sri Lanka. Moderated multiple regression analysis was used to test the proposed hypotheses.

The study finds that lean manufacturing practices, such as just-in-time deliveries, quality management, environmental management and employee involvement show a significant positive impact on supply chain sustainability. As proposed, the interactive use of SCS shows a significant, positive moderating impact on the relationship between employee involvement and social supply chain sustainability. The diagnostic use of SCS negatively moderates the relationships between just-in-time deliveries and economic supply chain sustainability, and environmental management and economic supply chain sustainability. However, both interactive and diagnostic uses of SCS do not show any significant moderating impact between lean manufacturing and environmental supply chain sustainability.

The following limitations should be taken into account in interpreting the results and implications of this study. Firstly, the study refers to supply chain sustainability as environmental, social and economic sustainability. As these concepts represent broader perspectives of sustainability, and no consensus on how to measure has yet been agreed, future studies may focus on other variables that might capture different perspectives of supply chain sustainability. Secondy, future researchers may further extend the role of SCS (including all four control systems – belief, boundary, interactive and diagnostic) in examining the impact of leanness on supply chain sustainability. Thirdly, this study has considered a sample of manufacturing SMEs in the Western province in Sri Lanka. The results should be carefully generalised to other manufacturing organisations in Sri Lanka and beyond. Finally, future studies may also investigate the impact of leanness on supply chain sustainability by using alternative methodologies, such as multiple case studies.

SMEs are more likely to focus on diagnostic control systems with the aim of promoting economic supply chain sustainability. However, the findings reveal that manufacturing SMEs in the developing country context lack strong SCS to enable supply chain sustainability.