Study On Lean Management Accounting

With the development of market economy, the mode of production is gradu-ally changed from push production by enterprises to pull production by customers and large batch production has become small-lot production as well. To adapt to these changes, innovation and reform are necessary in the accounting management mode. Traditional transaction-oriented accounting system has many defects such as ignoring the integration of the production process and the accounting measure-ment. These problems have brought people some new ideas. Lean management accounting, which is guided by customer value and aims at eliminating waste, has gradually been outlined, and its academic method system has taken initial shape through the scholars’hard work. However, as a whole, there are only a few schol-ars researching in this filed at home and abroad. The academic method system of lean management accounting is still incomplete and few scholars have tried to build up theoretical framework of it. Some components in the framework of lean management accounting are discussed in this paper based on the related articles and theoretical knowledge of lean management accounting, and by field research, to put the theory into practice on a project called lean improvement of supporting departments expense allocation investigation, which is conducted by GEW Co. subordinated to Y Group Corporation.This paper has five parts. Part one is introduction, which mainly introduces the background, significance, methods of the research, the structure of the essay and the expected contributions.Part two is literature review and discussion of basic theory. In the section of literature review, the few literatures is introduced and commented. In the section of basic theory, relative concepts are discussed, including lean thinking, lean produc-tion, lean enterprise and lean management accounting. Value, value stream, flow, pull and perfection are the five principles of lean thinking. Lean thinking comes from the need of reality that the whole manufacturing industry has been facing the difficult situation caused by waste. Toyota Motor Corporation creatively devel-oped its own way of production during practice. After long-term investigation and survey, American specialists and scholars developed this kind of production into a theory and called it lean production. Then they promoted the process of systemati-zation of lean thinking and applied lean thinking in all trades and professions, in-cluding accounting. Besides, the meaning of lean, lean management accounting and lean enterprise are discussed in this part. And this paper points out that a lean enterprise should have three essential features:lean production, lean culture and lean cooperative relationship.Part three analyzes the theoretical elements of lean management accounting. Some components in the framework of lean management accounting are discussed, including object, elements, objective, functions and principles. The object of lean management accounting is the value movement in value stream management, with value stream as its form of expression and fund flow, information flow and mate-rial flow as its carriers. The elements of lean management accounting, besides the traditional elements, still include value stream, appreciation and core competence. The objective of lean management accounting is to make value streams appreciate to the fullest extent by designing and managing each value stream and to make value streams cooperate with each other by coordinating them, so as to achieve sustainable growth in total value of enterprises whose core is customer value. The functions of lean management accounting include prediction, decision-making and evaluation. Forecasting includes sales forecasting and operation forecasting. Deci-sion making is mainly reflected in the decision for self-manufacturing or out-sourcing and the decision for product optimization and customers. In terms of evaluation, there are two evaluation indicators in unit performance and value stream performance respectively, which constitute the index-evaluation system of lean management accounting. As regards to principles of lean management ac-counting, the author summarizes it into three points. The first is to reduce ac-counting procedures. The second is that accounting procedures support lean trans-formation. The third is information exchange easy to understand.Part four is the methods, mode and construction of lean management ac-counting. According to the thought from concrete to abstract and from elements to entirety, firstly, this part discusses some important tools and methods using by lean management accounting. The important tool is box scores. There are two purposes to use box scores. The first is to use it as a planning tool. The second is to use it as a monitoring tool. It can be say that box scores provide a structured methodology for evaluation of the state of operation and the state of finance. The basic methods mainly include characteristic costing method and target costing method. When the cost of one single product is needed, the characteristic costing method is used to revise the average value stream cost. Target costing method is an effective tool for lean improvement. The reason that use target costing method is to focus the driv-ing factor for the development of enterprise on customer value. Based on this, this paper discusses value stream costing in two aspects. The first is comparing the value stream costing with traditional cost method and activity-based cost. And this paper maintains that value stream costing is more effective than the other two for lean enterprises. The second is discussing how to use value stream costing and the value stream income statement which is the final output by using value stream costing. Finally, the paper discusses the establishment idea and way to maturity of lean management accounting system. To construct lean management accounting framework, value stream management is the main line and time and space are two dimensions. The way to maturity is to assure that the establishment of lean ac-counting system goes well and the financial control is effective.Part five is case analysis. In this part, the paper firstly introduces the back-ground of GEW Co. subordinated to Y Group, and then makes a detail analysis on the lean improvement project of manufacturing expenses allocation plan of its production supporting department. Based on field research, the author attempted to make a new allocation scheme for manufacturing expense from the perspective of value stream and discusses the advantages and disadvantages of the scheme.The major contributions of this paper are in three aspects. First, on the basis of existing literatures, the paper discusses the theoretical frame of lean manage-ment accounting in the aspects of object, objective, functions and principles. It can provide literature reference for research following. Second, in application study, on the basis of discussing the basic tools and methods, this paper put forward that the construction of lean management accounting can be implemented in time and space dimensions. Third, on the basis of field research, the paper analyzes and discusses the lean improvement project of supporting departments expense alloca- tion launched by GEW Co. subordinated to Y Group Corporation.The shortage of the paper is that it only provides a new idea from the per-spective of value stream in its case analysis. And it only considers local lean im-provement, which is the allocation plan improvement of manufacturing expenses of production supporting department. As to how to build up a relatively complete lean management accounting system for GEW Co., further research is required.