Contemporary Issues And The Impact Of Technology On Management Accounting(Topic 1: Part 2)

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Lecture OutlineIdentify the impact of technology on MA

Describe the modern production system CIM/CAD, Cellular manufacturing, FMS

Discuss the inventory management systems

Discuss the concept of ABM, TQM & Value Chain*BKAM 3033 Topic 1

BKAM 3033 Topic 1

MA in a Changing Environment

Organization must adapt to changing environments & MA must adapt to changing organization.*BKAM 3033 Topic 1

BKAM 3033 Topic 1

MA in a Changing Environment-Changing Technology

Tech has changed the way we live.Organizations have been similarly influenced by changing technology & will be continually influenced by breakthroughs in the future.Probably the biggest impact of technology on organizations => the proliferation of products & services related to information.To be successful, organizations must recognize the advantages of greater access to information.

To be successful, organizations must*BKAM 3033 Topic 1

BKAM 3033 Topic 1

MA in a Changing Environment-Changing Technology Traditional mass production Advanced Manufacturing Technology (AMT) *BKAM 3033 Topic 1

BKAM 3033 Topic 1

MA in a Changing Environment-Changing Technology AMT:CAD, CAM, CIM, JIT inventory systems.CAD, CAM, CIM, JIT affect one another and jointly increase organizational effectiveness.

Computer-Integrated Manufacturing (CIM)- is the term used to describe an org that has all its systems linked by computer.

Computer-Assisted Design (CAD)-is the use of computers in product development, analysis & design modification to improve the quality & performance of the product.*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Computer-aided manufacturing (CAM)is the use of computer-based software tools that assist engineers and machinists in manufacturing or prototyping product components.

Its primary purpose is to create a faster production process and components with more precise dimensions and material consistency, which in some cases, uses only the required amount of raw material (thus minimizing waste), while simultaneously reducing energy consumption.

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Flexible Manufacturing System (FMS)

A particular type of CAM is the FMS.FMS a computerized network of automated equipment that produces one or more groups of parts or variations of a product in a flexible manner. Uses robots & computer-controlled material-handlings systems to link several stand alone numerically controlled machines in switching from one production run to another. Is a manufacturing system in which there is some amount of flexibility that allows the system to react in the case of changes, whether predicted or unpredicted.

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Most FMS systems comprise of three main systems:The work machines which are often automated CNC machines are connected by a material handling system to optimize parts flow the central control computer which controls material movements machine flow The main advantages of an FMS is its high flexibility in managing manufacturing resources like time and effort in order to manufacture a new product.The best application of an FMS is found in the production of small sets of products like those from a mass production. *BKAM 3033 Topic 1

BKAM 3033 Topic 1

Cellular Manufacturing (Work Cells)

A model for workplace design. Lean manufacturing. Are small groups of related manufacturing processes organized in clusters to assemble parts of finished products, often in U shape.- Major characteristics are:Related manufacturing processes organized in clustersOperations moved togetherAll production activities from raw materials stage to finished goods stage in the same cellVisual control is easy Flexibility to produce a high variety of low demand products and maintaining the high productivity of large scale production. *BKAM 3033 Topic 1

BKAM 3033 Topic 1

Benefits and Cost of Cellular ManufacturingProcesses become more balanced and productivity increases Part movement, set-up time, and wait time between operations are reducedEliminate overproduction cost savings Require high investmentBenefitsCost*BKAM 3033 Topic 1

BKAM 3033 Topic 1

A firm that assembles air-handling products faced high inventories and erratic delivery. They originally assembled units on a traditional line. Long setups and logistics required long production runs. Often, they pulled products from finished goods and rebuilt them for custom orders.

We built twelve small (1-3 person) assembly workcells that were always set up and ready. People worked in different cells each day and assembled to customer order. Finished Goods Inventory dropped by 96%. Lead-time was 24 hours. Productivity improved by 20%-30%.EXAMPLE*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Robot

More companies are using robots than ever before.Robot is a computer-programmed & controlled machine that perform repetitive activities.Benefits:-Increased capacity-Decreased time to manufacture a part-Reduced past-due orders.Cost saving decreasing labor costs & tooling costs.

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

ERP packaged software programs:Automate & integrate the majority of their business processes.Share common data & practices across the entire enterprise.Produce & access info in a real-time environment.ERPs key concept is a central depository for all organization data so that they are accessible in real time by & in an appropriate format for a decision maker.Enterprise Resource Planning System (ERP)*BKAM 3033 Topic 1

BKAM 3033 Topic 1

The benefits of ERP:Reduced overheads by elimination of duplicationImproved customer service & better qualityMore timely management information

Enterprise Resource Planning System (ERP)*BKAM 3033 Topic 1

BKAM 3033 Topic 1

In sum, CIM, JIT, CAM,CAD give organisations the flexibility to make a variety of products, as well as different models of the same product, rapidly and cost-effectively.They break down the traditional barriers separating input, conversion and output stages of production.In modern production system input, conversion and output activities merge into one another.decrease the need for costly inventory buffers to protect conversion processes from disruptions.increase product reliability because they increase automation and technical complexity.

*BKAM 3033 Topic 1

BKAM 3033 Topic 1

Discuss how the changing technology may have impacts on management accounting practices.*BKAM 3033 Topic 1 What role has the increasingly competitive business environment played in the development of management accounting?

BKAM 3033 Topic 1