1. Contemporary Issues And TheContemporary Issues And The
Impact Of Technology OnImpact Of Technology On
Management AccountingManagement Accounting
BKAM 3033 – Topic 1(b) 1
2. Lecture OutlineLecture Outline
• Identify 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(b) 2
3. MA in a Changing EnvironmentMA in a Changing Environment
Organization must adapt to
changing environments &
MA must adapt to changing
organization.
BKAM 3033 – Topic 1(b) 3
4. MA in a Changing Environment-MA in a Changing Environment-
Changing TechnologyChanging Technology
• Technology 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 mustBKAM 3033 – Topic 1(b) 4
5. MA in a Changing Environment-MA in a Changing Environment-
Changing TechnologyChanging Technology
Traditional mass production
Advanced Manufacturing
Technology (AMT)
BKAM 3033 – Topic 1(b) 5
6. MA in a Changing Environment-ChangingMA in a Changing Environment-Changing
TechnologyTechnology
AMT:
• CAD, CAM, CIM, JIT inventory systems.
• CAD, CAM, CIM, JIT affect one another and
jointly increase organizational effectiveness.
Computer-Integrated Manufacturing (CIM)Computer-Integrated Manufacturing (CIM)
-- is the term used to describe an org that has all its systems
linked by computer.
Computer-Assisted Design (CAD)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(b) 6
7. 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(b) 7
8. Flexible Manufacturing System (FMS)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(b) 8
10. Flexible Manufacturing System (FMS)Flexible Manufacturing System (FMS)
• 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(b) 10
11. Cellular Manufacturing (Work Cells)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 clusters
Operations moved together
All production activities from raw materials
stage to finished goods stage in the same
cell
Visual 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(b) 11
12. Benefits and Cost of Cellular Manufacturing
Processes become more balanced and productivity increases
Part movement, set-up time, and wait time between operations
are reduced
Eliminate overproduction – cost savings
Require high investment
Benefits
Cost
BKAM 3033 – Topic 1(b) 12
13. • A firm that assembles air-handling products faced high
inventories and unpredictable 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(b) 13
14. RobotRobot
•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(b) 14
15. • 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.
• ERP’s 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)Enterprise Resource Planning System (ERP)
15BKAM 3033 – Topic 1(b) 15
16. • The benefits of ERP:
– Reduced overheads by elimination of duplication
– Improved customer service & better quality
– More timely management information
Enterprise Resource Planning System (ERP)Enterprise Resource Planning System (ERP)
16BKAM 3033 – Topic 1(b) 16
17. Modern Production System
• In sum, CIM, JIT, CAM,CAD give organizations 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(b) 17
18. Discuss how the changing technology gives
an impact on management accounting
practices?
Assignment
BKAM 3033 – Topic 1(b) 18