Kaizen Costing Method And Its Role In The Management Of An Entity Accounting Essay

Kaizen be Method And Its reference In The Management Of An Entity Accounting Essay1. IntroductionThe purpose of my article is to let the managers know well-nigh a costing system, which applied even in the underway crisis, will non only choke to an avoidance of bankruptcy, but may lead to even make a profit by ameliorate competitiveness and financial strength.Quality style to interminably meet the customers demands, total quality core to continuously meet the customers demands in terms of minimum cost, and total quality management ensures to continuously meet the customers demands in terms of minimum cost, involving all employees.2. ObjectivesThe main objective of this research is to identify a solution to perpetual increase of production quality while reducing cost and time of selling. To achieve this goal, we conducted a hypothetic fundamental research, through which I tried to transpose several features of Japanese management plan for a new costing method.3. Methodolog yWith no intention to exhaust the limits of thissubject matter, I made appeal in my scientific shape up to a rigorous study of the literature and analyzed various points of view elevated by specialists in this field. I made appeal to research methods such as documentation, analysis, synthesis. Assumptions, methodology approach and the results are my own contributions.4. AnalysesMaintenance and melioration are two inseparable impressions in Japanese management. service is assessed by two terms kaizen and innovation.Kaizen is a Japanese management concept launched by Masaaki Imai, which proved to be the key to Japanese competitive success. The significance of this concept is KAI = Change and ZEN = for better, and the translation is continuous betterment, that promoter small improvements to the ongoing efforts. Unlike the Western conception, implying total change, at large intervals of time, using large amounts of resources and a high cost level, Kaizen be seeks daily, gradual , s mild, but continuous improvements, which take place at minimal cost.Kaizen cost message strategy is that a single day should not pass without an improvement to intervene in the activity of each employee or each entity. The Japanese have shown that by applying this strategy, improvement is achieved with minimal expenditure. particular proposition characteristics that ensure successful approach of Kaizen activities are the fol lower-rankingingdisregards all ideas implemented so far in the organization of productionrejects the whole existent situationit does not look for perfection, seeking a 40-50% improvement of the existent situation, but at an acceptable costallows any manager to use their knowledge and face-to-face skillsthe ideas produced by many people are better than the ideas of a single personthe improvements have no limits.Cost is one of the basic synthetic indicators that characterize the effectiveness of an entitys activity. The importance of production cost is link up to the functions it fulfills in the context of economic-financial mechanism, schematically presenting itself as follows ensures the resumption of production, measures the means of production and labour, allows the tally of some efficiency indicators and the real knowledge of activity quality, sizes the profitability of economic entities, etc.1Kaizen Costing Management is focused on improving each process of a technological product sheet, the main goal being eliminating losings and minimizing costs. Process improvement ensures production efficiency, kaizen type activities ensuring maximization of product value corresponding to the requirements of the beneficiary, a qualitative differentiation of this. There are eliminated all those functions of the product which the customer has no interest in and which suffer a cost increase without a correspondent in value.The KAIZEN principles presumes a practical approach and low costs of improvement. The Kaizen management frame is based on the continuous loss reduction by means of methods that do not rely on investments, but on the improvement of the processes and the employeesperformance. According to the Kaizen principles, we must be sure that, when we take an exercise, our action will go on in the best possible itinerary and is not merely an intermediate action to generate a temporary result2Innovation is achieved by sudden changes and generates radical improvements, compared to the initial situation, which is due to significant investments in technology, performance and equipment. Figure no. 1 shows the distinction between innovation, kaizen and maintenanceSource Imai 1997Figure no. 1Therefore, Imai (1997) describes that the improvement can be divided into Kaizen and innovation. Kaizen signifies small improvements as a result of ongoing efforts. Innovation get hold ofs a drastic improvement as a result of large investment of resources in new technology or equipment. The pen also explains that in the context o f Kaisen, management has two major functions maintenance and improuvement. Maintenance refers to activities directed towards maintaining current technologies, managerial and operating standards, and upholding such standards through training and discipline. Under its maintenance function, management performs its assigned tasks so that everybody can follow standard operating procedure.3Thomas M. Fischer and Jochen A. Schmitz K in Control Measures for Kaizen Costing-Formulation and Practical delectation of the Half-Life Model considered that Kaizen costing focuses on continuous reductions of costs, which should be realized for existing products in a company. For planning and control purposes, comprehensive and efficient tools for measuring performance are required4.4. CriticalIn implementing Kaizen Costing strategy, managers rely on otherwise techniques, methods and tools such as quality circles, suggestions system, kanban, total productive maintenance, action plans, etc. The success of this strategy is subject to a number of changes in the entitys culture and value system on which it is based.Suggesting small steps strategy, Kaizen Costing is a concept of umbrella which treats the basic methods and concepts applied in quality management in Japan and whose value is recognized worldwide (Figure no. 2).The superiority of the concept stems from the fact that, by applying small steps strategy, the necessary resources are insignificant, while the strategies based on innovations involve huge investments, although the results are relatively the same. In addition, Kaizen brings in the forefront the employees of the entity, who are motivated to participate consciously and responsibly to achieve the objectives of the entity. In this process the almost important dimension is the organizational one, the ability to communicate. victorious implementation of this approach is given by the technical and managerial knowledge, put together, and by the across screening of some management tools (ABC, benchmarking).Source http//afr.kaizen.com Imai (1986)Figure no. 2.The implementation of Kaizen Costing management system in economic organizations in our country would bring immediate gains by eliminating waste and losses, change magnitude labour productivity by 20-30%, reducing operating costs by 15-20%, reducing used areas, reducing the equipment needs and increasing the use of the remaining, increasing staff motivation. Kaisen Costing focuses the entity interest and attention on those places where you can reduce costs, this means on operating the production process and its development in the most efficient way. Unlike bum (used by design staff before the product is in production), Costing Kaizen Costing is used by production staff during product manufacture. Both follow the same target, but they differ in the method of settling the target on perspective, Target Costing is based on customer considerations, while Kaizen Costing is based on profitability ta rgets imposed by manager.As a method of cost calculation and resizing, Kaizen Costing represents the expression of returning to the source, through the causes of performance and the roots of productivity, what is possible in a cross-viewing, and execute a process analysis under the ABC Method. Cost reduction approach results by examine the target-cost to the estimated one, and is fulfilled in terms of value, through an iterative process of continuous improvement.5Thus, Kaizen Costing is not kindle in the product but in manufacturing process, which is more than just a cost method, but a global management tool.Obviously, there are factors that hinder implementation and obtaining good results in Romanian entities. Among them the most influential one is the mentality, or psychological profile of Romanians, which do not encourage the achievement requirements of such management, but there is great criticism concerning the stress staff has to deal with.5. ConclusionsIn conclusion Kaisen Costing is the ideal management system to reduce costs. Through the application of this management style in managerial accounting, entities with limited resources could significantly mitigate the negative impact of current economic and financial crisis. As Masaaki Imai shows, Restructuring or reinventing your company can be destructive, expensive and often inoperable. Applying Kaizen in gemba (job, where the action occurs), significant improvement is achieved with low costs in core business processes production and services and can be obtained, as neer before, major leaps in customer satisfaction, in quality, productivity and profitability.For those who want to learn and apply this management system, I mention the following advantages implementation costs are reduced, as Kaizen makes better use of existing resources and does not require large investments in improving technology, staff training costs are lower than for other methods, in Romania there are consulting firms in the f ield, entities that have implemented Kaizen have achieved remarkable results in projection productivity, in cost reduction and competitiveness increase.