The Lean, Mean Brief

By Trapp, Roger | The Independent (London, England), December 18, 1996 | Go to article overview
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The Lean, Mean Brief


Trapp, Roger, The Independent (London, England)


It is well known that - chiefly as a result of the influence of Japanese companies - British manufacturers are changing the habits of generations. But to what extent are the accountants working in these organisations adapting their working methods in order to fit in with such techniques as just-in-time (JIT) production?

That is the question that a study from the Institute of Chartered Accountants' research body sought to answer. By the researchers' own admission, the answer is not conclusive, but the findings are at least encouraging for members of the profession.

The report, "Accounting and the New Manufacturing", points out that "some people have accused accountants and their techniques of retarding manufacturing improvements", and says that in three of the four companies studied "accountants were actively involved in the advances being implemented". In the fourth case, the management accountant "was not involved but had not inhibited change". But just in case it appeared that all was sweetness and light, the researchers - Christopher Cowton of Huddersfield University and Richard Vail of Trinity College, Dublin - add that in two cases the accountants reported having had difficulty in persuading their peers in other companies that they had no need to fear JIT. Lacking in earth-shattering substance as its findings may be, the report is important because it carries on the examination of the role of management accounting that has been continuing for the past decade or so. Pressure for adoption of such systems as activity-based costing (ABC) has been intense, while writers like Robert Kaplan have argued that management accounting has lost its relevance. Much of the blame has been laid at the door of academics - for conducting research at a distance far removed from practice and for teaching techniques that rely on an outdated view of manufacturing industry. Kaplan, in particular, has argued that traditional costing systems, performance measures and approaches to investment appraisal are inappropriate in this "new manufacturing environment" and may have seriously retarded the revitalisation of western manufacturing industry. He argues for the abandonment of old practices that are no longer suitable and for the development and adoption of new measurements and techniques. He himself has been associated with the establishment of what is known as the "balanced scorecard" as a way of providing a better guide to the health of an organisation. Cowton and Vail acknowledge that there are many elements to the new manufacturing approach - and so have devoted their energies to one of the best known, JIT. Their questions of each of the four organisations - all anonymous and representing different sizes and types of plant - were divided into three main parts.

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