Submitted by: Submitted by Duncan999
Views: 415
Words: 4461
Pages: 18
Category: Business and Industry
Date Submitted: 01/31/2013 10:14 AM
In order to improve the financial results at one of the Lebanon Gasket Company’s (LGC) facilities, Tom Walsh was hired as plant manager. Mr. Walsh had 20 years of experience as a manufacturing engineer and was tasked with turning around the plant’s declining profits and margins, excessive waste and inventory levels, unsatisfactory on-time customer delivery performance and shrinking market share. To achieve these goals, Mr. Walsh adopted the “lean manufacturing accounting program mindset” in use at the LGC’s Topeka plant since the plant was in favor of mass manufacturing since its inception in 1979. 18 months after implementing lean thinking the financial results had evaporated. Even though the Topeka plant had accomplished many of the goals, the financial results were disappointing. Mr. Walsh was able to transform the two main manufacturing processes, which were the injection molding and the extrusion molding into two value streams and four manufacturing cells. Each value stream contained two manufacturing cells and in total, 109 employees created over 175 different products produced across the molding processes. The traditional accounting practices that the Topeka plant had adopted since its inception were no longer compatible with the lean environment. The Topeka plant’s accounting policies and practices will have to evolve just as the manufacturing process evolved into a lean environment. To support a lean environment, the accounting practices must transform the financial reporting into a new method that will accurately capture the business processes. The accounting function will become more dynamic in order to capture senior management’s strategic planning objectives and to increase efficiency. Eliminating non-value activities and eliminating waste will become an accounting function which the traditional accounting system did not accomplish. Integrating the accounting function within management will allow the accounting department to properly...