Discussion: Lean Accounting and Waste

Lean manufacturing processes, such as Six Sigma or Kaizen, are popular because they reduce waste, thereby increasing profits. Still, accountants face several issues when switching to a lean manufacturing system. To begin, read the article The Lowdown on Lean Accounting and describe some of the issues accountants face when switching to a lean manufacturing system. Also identify some of the ways lean manufacturing reduces scrap, waste, and spoilage and how the accounting in these companies reflects the increased vigilance in preventing scrap, waste, and spoilage. Are there any downsides to enacting lean manufacturing from an accounting standpoint? If so, describe them.

The Lowdown on Lean Accounting (link) - http://www.journalofaccountancy.com/issues/2004/jul/thelowdownonleanaccounting.htm