Question

Strategic cost management highlights enhanced cost measurement systems, paving the way for management accounting to retain its relevance in today’s environment. Strategic cost management consists of those actions taken by managers to concurrently reduce cost as well as enhance customer satisfaction with the aid of modified / new approaches and techniques in managing cost more effectively / strategically (Drury, 2012).

Required:
a)   Advanced manufacturing technologies (AMT)

i)   What are the challenges management accountants and companies face in adopting this tool / technique? Use appropriate case example (s) where applicable.

Answer 1

a).

• Advanced manufacturing technologies are using most innovative technologies to create innovative new products or innovate and update the existing products with such technologies.
• It includes production activities that depend on information, automation of the process, computation, software, sensing and networking through adoption of various technologies.
• To meet customer demands Engineering and designing technologies like CAD, CAPP, automated material handling technologies like AS/RS, flexible manufacturing technologies like FMC/FMS, logistic related systems like JIT are implemented part of AMT.

(I).

• In order to survive and sustain in market, firms, always need to review and modify their strategies to sustain their market positions. For this, firms have adopted advanced manufacturing techniques.
• In this advances environment, timely access to relevant information, especially management accounting systems is important for effective decision making.
• Managers require to study and examine the role of MAS information, in relation between prrformance and AMT, specifically whether MAS mediated the relationship.
• Data were gathered from a mail questionnaire survey and semi structured interviews with listed manufacturing firms.
• Managers need to developed proper manufacturing strategy with adoptive technologies
• Traversing over their expertise and it is a bit difficult for the change over
• Proper controls need to be designed, implemented and monitored with proper adoptive strategy blend to yield expected results
• Several researches on AMT implementation and challenges faced by management accountants into successful adoption and implementation of manufacturing technologies discovered that most difficult preparatory factor is the company's strategy. In addition, businesses need to determine that their industry is suitable on the grounds of flexibility.
• With high rate of product introduction, there is an ability to reduce product cost.
• Hence, management accountants need to be more flexible and less rigid to adoption of various techniques ofAMT like CAD,material handling techniques like AS/RS, need to be more clear of their business or industry position in the market., t hey should have proper understanding of AMT, understanding of proper business practices with AMT, clear objectives and expectations of AMT.