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MUM faculty continue leading research in lean accounting with new paper

Maharishi University of Management - The Review    Translate This Article
21 June 2016

The Excellence In Action page of Global Good News is featuring a new article by Maharishi University of Management* business faculty members Dr. Andrew Bargerstock and Dr. Ye Shi, yet again showing MUM's leadership in the field of lean accounting.**

The article, entitled ''Leaning Away from Standard Costing? Reconciling Lean Accounting Theory and Practice,'' examines an inconsistency in lean accounting theory and practice related to use of standard costing in U.S. manufacturing enterprises that utilize Toyota-style process-improvement techniques.

It appears in the June 2016 issue of Strategic Finance, the monthly peer-reviewed journal of the Institute for Management Accountants (IMA). [link not yet available]

Enjoy the article on the Excellence in Action page.

According to Dr. Bargerstock, lean manufacturing is increasingly being adopted in the U.S., but research shows that when those companies don't also adopt lean accounting, it results in waste and inefficiency.

''This is because variance analysis is replaced by work cell metrics that are considered to be superior methods for production control,' Dr. Bargerstock says.
Despite the advantage of adopting lean accounting, field reports and a 2013 research study conducted by Manjunath Rao at MUM indicate that the majority of mature lean manufacturers continue to use standard costing and variance analysis.

The article by Dr. Bargerstock and Dr. Ye sheds new light on possible reasons for why companies aren't adopting lean accounting, including lack of knowledge about lean accounting, deeply entrenched institutional histories of standard costing, and inertia sustained by legacy enterprise resource planning systems.

Copyright © 2016 Maharishi University of Management, USA - The Review

*Maharishi University of Management (MUM) is a private, accredited university featuring Consciousness-Based Education, designed to develop the student's total potential. The curriculum offers bachelor's, master's, and doctoral degrees in the arts, sciences, humanities, and business, but also integrates self-development programs. All students, faculty, and staff practice the Transcendental Meditation® technique, which develops integrated brain functioning, promotes wellness, and enhances learning ability and academic performance. Other innovations include taking one course for 3-1/2 weeks with a three-day break between each course, and organic vegetarian meals. Visitors Weekends are held throughout the year. For more information, call the Admissions Office at 800-369-6480 [toll-free in US; outside US call: 1 641-472-1110] or visit

**Lean manufacturing or lean production, often simply ''lean'', is a systematic method for the elimination of waste (''Muda'') within a manufacturing system. Lean also takes into account waste created through overburden (''Muri'') and waste created through unevenness in work loads (''Mura''). Working from the perspective of the client who consumes a product or service, ''value'' is any action or process that a customer would be willing to pay for.

Essentially, lean is centered on making obvious what adds value by reducing everything else. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as 'lean' only in the 1990s. TPS is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker, has focused attention on how it has achieved this success.

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