MALP

1
MALP

• Strategic Implications of Mgt. Acctg. Systems
• Quality choices can be affected
• Cost is fundamental
• Provides information on timeliness of production

2
Determinants
Strategic Choices
Cost Structure
Environment
-Structural Elements -Work Processes
Management Accounting System
Production Methods
3
Types of Production Methods

• Craft
• Mass Production
• Lean Production (Flexible Mfg. System)

4
Structure Differences

• Mass
• Inflexible single purpose
• High set-up time
• Low labor skill level
• Lean
• Multi-use equipment
• Low set-up time
• Skilled labor force

5
Work Process Differences

• Mass
• Supervisory control
• Precise control over supplier
• Standardized products
• Independent, sequential prod. develop.
• Lean
• Empowered workers
• Cooperative relationship w/suppliers
• Customer focused organization
• Concurrent, integrated design

6
Cost Structure

• Mass
• Driven by volume
• Allocation of fixed costs
• Lean
• Driven by process or activity

7
Mgt. Acctg. System in Lean Production

• Driver focused
• Value chain focused
• Limited need for inventory reporting
• Indirect cost orientation

8
Lean Prod--Attributes

• Technical
• Better decision relevance
• Driver focused
• External orientation
• Cross functional value chain focus
• Better process understanding

9
MALP--Attributes, cont.

• Behavioral
• Team responsibility
• Multiple motivation
• Accountant as team player
• Quality commitment
• Global optimization
• Risk of burnout

10
MALP--Attributes, cont.

• Cultural
• Team responsibility
• Cooperation vs. competition
• Focus on overall common good
• Change in locus of power