Study Objectives
     1. Describe the basic features of lean 
         manufacturing.
     2. Explain the basics of lean accounting.
     3. Describe features and characteristics 
         costing for multiple products.
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                Lean Manufacturing
      • An operating approach designed to 
        eliminate waste and maximize customer 
        value.
      • Characterized by delivering
        –The right product…
        –In the right quantity…
        –With the right quality (zero-defect)…
        –At the exact time the customer needs it…
        –At the lowest possible cost.
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                Lean Manufacturing
      • Principles of Lean Thinking:
        –Precisely specify value by each particular 
          product.
        –Identify the “value stream.”
        –Make value flow without interruption.
        –Let the customer pull value from the producer.
        –Pursue perfection.
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                Lean Manufacturing
      Value by Product
      • Value is determined by the customer
      • The value of a product to customer is the 
        difference between realization and 
        sacrifice
         –Realization is what a customer receives.
         –Sacrifice is what the customer gives up for the 
           basic and special product features, quality, 
           brand name, and reputation.
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               Lean Manufacturing
     Value Stream (con’t)
     • The value stream is made up of all 
       activities, both value-added and non-
       value-added, required to bring a product 
       group or service from its starting point to a 
       finished product in the hands of the 
       customer.
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