The use of costing methods in lean manufacturing industries: a literature review

Abstract:

The adoption of Lean philosophy by companies has motivated the need for improvements in the traditional accounting system. Such a system has not been seen with favor by Lean organizations under the accounting focus when it comes to waste elimination. After all, the traditional costing system is not conceptually prepared to operate efficiently under the Lean production model. Therefore, the aim of this research was to evaluate the degree of integration of costing methods (ABC, TDABC and VSC) in Lean enterprises observing how these methods integrate to the reality of the Lean Manufacturing model. A literature review encompassing the period 1994-2014 was carried out. Studies were critically analyzed to develop a method of classification in order to obtain data and produce results and conclusions under a qualitative and quantitative approach. The results showed that, although costing methods are applied, these mostly serve only as a reference for the process of formal identification of costs, theory or comparative analysis to the traditional cost system, but are not actually integrated to the production analysis process.

Keywords:
Lean manufacturing; Activity-Based Costing; Time-Driven Activity Based Costing; Value Stream Costing