The document discusses key aspects of the modern business environment including just-in-time production, total quality management, and computer integrated manufacturing. It describes how modern businesses operate in a highly competitive environment using advanced technologies like robotics. Methods like just-in-time focus on receiving goods only as needed to reduce waste and inventory costs. Total quality management seeks to ensure the highest quality through continuous feedback and improvements. Computer integrated manufacturing integrates the manufacturing enterprise through integrated systems and data communications.

1. Modern Business
Environment and
Management
Accounting

2. What is Modern Business Environment ?
 The modern business environment has
changed drastically in a short time. Business
technology has advanced business functions
and operations to levels not previously
believed possible. The role of accounting and
business is perhaps one of the most reliable
functions in business. While a few basic
procedures or methods have changed, the
purpose of accounting remains the same.
Business owners often use accounting to
measure their company’s financial
performance and make business decisions.

3. Modern Business VS Traditional Business
Modern Business Traditional Business
Highly competitive environment Relatively simple production
technology
Use of robotics Mostly manual
Initiate new industries Little innovation
Change in focus towards customer,
quality and value
Concerned primarily with internal
matters
Flexible production system Labour and material costs were
easily identifiable

4. Just In Time
 An inventory strategy companies employ to
increase efficiency and decrease waste by
receiving goods only as they are needed in the
production process, thereby reducing
inventory costs
 JIT Production : - a production system driven by demand for
Finished Goods where each component on a Production Line
is produced ONLY when needed for the Next Stage
 JIT Purchasing : - a purchasing system where Material purchase
is contracted in such a way that Receipt & Usage of material,
to max. extent possible, COINCIDE.

5. Characteristics of JIT Production & JIT Purchasing
JIT Production JIT Purchasing
Reduction storage spaces
needed to store materials
Flexible work teams
Reliable delivery schedules Defects aggressively
eliminated
High quality materials used Setup & manufacturing
cycle time reduced
Long-term agreements
needed with few suppliers
Simplified production
processes
Reduction storage spaces
needed to store materials
Purchase in small lots

6. Advantage & Disadvantage of Just In Time
Advantage Disadvantage
Increase in cash flow Danger of lost sales
Less space required for stock Less time for quality control
on arrival of materials
Reduction in stockholding
costs
Increased ordering and
admin costs
Closer relationships with
suppliers
High dependence on
suppliers

7. Total Quality Management (TQM)
 Total Quality Management (TQM) is a
comprehensive and structured approach to
organizational management that seeks to
improve the quality of products and services
through ongoing refinements in response to
continuous feedback.
 Seeks to ensure that goods produced &
services supplied are of Highest Quality .

8. Types of quality cost
 Quality costs or cost of quality is a means to quantify the total cost of
quality-related efforts and deficiencies.
 External Failure Cost:
 Cost associated with defects found AFTER the customer receives the product or
service. Example: Processing customer complaints, customer returns, warranty
claims, product recalls.
 Internal Failure Cost:
 Cost associated with defects found BEFORE the customer receives the product
or service. Example: Scrap, rework, re-inspection, re-testing, material review,
material downgrades
 Inspection (appraisal) Cost:
 Cost incurred to determine the degree of CONFORMANCE to quality
requirements (measuring, evaluating or auditing). Example: Inspection, testing,
process or service audits, calibration of measuring and test equipment.
 Prevention Cost:
 Cost incurred to PREVENT (keep failure and appraisal cost to a minimum) poor
quality. Example: New product review, quality planning, supplier surveys,
process reviews, quality improvement teams, education and training

9. Six Key Features of TQM
 1- Customer-oriented : - TQM focuses on
customer satisfaction through creation of better
quality products and services at lower costs.
 2 - Employee involvement and empowerment:
Teams focus on quality improvement projects
and employees are empowered to serve
customers well.
 3 - Organization-wide : - TQM involves every
department or division.
 Ruj : http://www.tqm.com.my/web/05_bookArticle_13.html

10.  4 - Continuous improvement: - Quality
improvement is a never-ending journey.
 5 - Strategic focus : - Quality is viewed as a
strategic, competitive weapon.
 6 - Process management : -TQM adopts the
concept of prevention through process
management.

11. Benefits of TQM
TQM has numerous benefits. It enables organizations
to:
 attain higher profitability and increased market
share
 improve customer satisfaction
 improve organizational productivity
 improve employee morale and job satisfaction
 create a positive work culture
 undertake systematic problem solving and
decision making through project teams
 improve teamwork
 create a climate conducive to continuous
improvement

12. Computer integrated Manufacturing (CIM)
 CIM is the integration of the total manufacturing
enterprise through use of integrated systems
and data communications coupled with new
managerial philosophies that improve
organizational and personnel efficiency.

13. Types of CIM system
 Computer Aided Design (CAD)
 Involves the use of computers to create design
drawings & product models.
 Computer Aided Engineering (CAE)
 The broad usage of computer software to aid in
engineering tasks
 Computer Aided Manufacturing (CAM)
 The use of computer software to control machine
tools & related machinery in manufacturing of
work pieces.

14. http://en.wikipedia.org/wiki/Computer-integrated_manufacturing
 Computer Aided Process Planning (CAPP)
 The use of computer technology to aid in the process
planning of a part of product, in manufacturing.
 Computer Aided Quality Assurance (CAQ)
 Engineering application of computers & computer
controlled machines for the inspection of the quality of
products.
 Production Planning & Control (PPC)
 Concerned with planning & controlling all aspects of
manufacturing, including materials, scheduling machines &
people, & coordinating suppliers & customers.
 Enterprise Resource Planning (ERP)
 Systems integrate internal & external management
information across an entire organization, embracing
finance/accounting, manufacturing, and sales & services.

15. Benefits of CIM
 improves production productivity by 40 to 70
percent, as well as enhances engineering
productivity and quality.
 also decrease design costs by 15 to 30 percent,
reduce overall lead time by 20 to 60 percent,
and cut work-in-process inventory by 30 to 60
percent.
 there is a direct relationship between the
efficiency of information management and the
efficiency and the overall effectiveness of the
manufacturing enterprise.
 http://www.referenceforbusiness.com/management/Bun-Comp/Computer-
Integrated-Manufacturing.html