Elimination of non-value activity-jit features, Managerial Accounting

Elimination of non-value added activity

JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Waste is stated as anything which does not add value to a product.

The cycle time involved in manufacturing and selling a product consist of:

•    Process time-add values
•    Inspection time
•    More time             
•    Queue time
•    Storage time

Of these 5 steps only process time actually adds value to the products. All the other activities add cost and No value to the production and therefore are deemed as non-value within the JIT philosophy.

Usually in many companies, process time is less than 10% of total manufacturing, lead and cycle time. Therefore 90% of the manufacturing lead time disassociated with the product, adds cost but no-value to the product by adapting a JIT philosophy and forecasting, on reducing lead time, it is claimed that total cost can be significantly reduced.

The ultimate products with lead-time = processing time, and eliminating all non-value adding activities.

Posted Date: 12/6/2012 7:08:13 AM | Location : United States

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