Beruflich Dokumente
Kultur Dokumente
In standard cost accounting, false precision often occurs in the way product costs are
represented. Since precision is a limit to accuracy, false precision leads to unjustified
confidence in the accuracy of the product cost.
CONTENT
^ 4 Executive Summary
^ 5 The Transformation from
Standard to Lean Cost
Accounting
5 Precision Versus Accuracy
6 Standard Versus Lean
6 Product Versus Value Stream
Costing
8 Changing Versus Not Changing
^ 9 Profitability and Cost
Management in the Lean
Enterprise
9 Aligning Lean Enterprise
Processes
9 One Application for a Lean
Transformation
9 Pulling the Lean Accounting
Profit Lever
9 Learn More Today
Dave Strothmann
Manufacturing Value Network Director
SAP America Inc.
Executive Summary
Amount
Direct material
$2,502.12783
Direct labor
$151.43729
Overhead
$932.67215
Product cost
$3,586.23727
Standard
Lean
Work-order focus
Efficiency and utilization
Process focus
Availability and overall equipment
effectiveness
Cycle time and throughput
First-pass yield
Payroll expense
Actual cost
Direct cost
Value stream cost and profitability
Hourly, daily, weekly, and monthly
reports
Accurate summary-level information
Variance analysis
Quality assurance
Direct-labor tracking
Standard cost
Overhead allocations
Product cost and profitability
Month-end reports
Precision without accuracy
Direct material
purchases
Machine costs
Facility and
utility cost
Figure 1: Inputs to
Value Stream Cost1
Value Stream
Labor
expense*
Subcontract
cost
Other direct
value stream
costs
period. The value stream and consolidated plant-level P&L statements include
a return-on-sales calculation that is
the primary measure of value stream
performance.
Also shown on the consolidated plantlevel P&L statement are support costs
and any non-revenue-generating value
Today, across the manufacturing landscape, the focus is on value and away
from standard cost accounting methods
that focus on product instead of value
stream costing. For many manufacturing
companies, the time to pull the lever on
lean accounting is now.
A comprehensive profitability and cost
management application helps you meet
the challenges of lean accounting. It
improves your visibility into true value
10
www.sap.com /contactsap