Management Control Systems The role of Accounting is often Stated to be Providing Information: Strategic Cost Management Assignment, SMU, Singapore

Topic 1: Management Control Systems
The role of accounting is often stated to be providing information for decisions. Management accounting, however, fulfills a much broader role in organizations. As well as providing a framework for planning, management accounting has an important role in management control. This topic will
introduce the concept of management control and consider the role of management accounting in management control together with some issues in the design of management accounting systems, the types of control, and how the various levers of control can be integrated.

Topic 2: Lean Manufacturing & Quality Control
This topic introduces traditional manufacturing management techniques and strategies. The 5- P’s of manufacturing are specifically considered; i.e. the product, plant, process, program, and people. The three traditional types of manufacturing; i.e. Job; Batch; and Flow production are also studied, and concepts such as quality and reliability are also introduced. The Lean Manufacturing techniques originating from Japan, such as Flexible Manufacturing Systems (FMS); and Total Quality Management (TQM) are also considered. It is shown that concepts and techniques used in manufacturing can also be used in service industries. The technologies that are disrupting today’s manufacturing and service environments and the technology trends that will change the way organizations create and deliver a product or service in the near future are also discussed.

Simulation of Production Function (Video & discussion)

Mini-Case Study on Accounting for Quality: Clean Shaven followed by Balance of Topic 2

Topic 3: Cost Accounting and Cost Management in a Lean Environment
This topic continues to look at production management techniques and strategies, especially the Leaner production philosophies originating from Japan, such as Just-In-Time production (JIT). The strategic management accounting issues raised by such philosophies and techniques and aspects of the influence of the philosophy on production and purchasing are also covered. ‘Backflush Costing Systems’ are introduced in this topic, as an alternative to job-order and process costing systems.

Mini-Case on Accounting in a JIT Environment: Silicon Valley Computer

Topic 4: Life Cycle Costing Systems
This topic overviews the complexity that exists in modern industrial settings, and why the conventional management accounting techniques may provide misleading information in such environments. It is shown that indirect costs make up the largest percentage of total costs in such complex firms and that there are many challenges in allocating such indirect costs. Methods of
identifying ‘obsolete’ cost systems and of improving cost control are also discussed. The whole of Life Costing, i.e. costing before, during, and after manufacturing or service delivery is considered within a complex and competitive industrial setting. A part of Life Cycle Costing called Target Costing, i.e. the techniques of controlling pre-production design costs, is considered in detail.

Case Study on Target Costing: Phraud Car parts Company case Study – Discussion
Topic 5: Benchmarking
This topic discusses in-depth ‘Benchmarking’ which is the formal process of measuring and comparing a company’s operations, products, and services against those of top performers, both within and outside that company’s primary industry. Benchmarking approaches such as internal, competitive, functional, and generic are specifically considered, as are measures used to evaluate performance.

Topic 6: Activity-Based Cost Allocation Systems
This topic focuses on the principles of Activity Based Costing (ABC), which is shown as the response to the challenge of complexity. Aspects such as “volume”, “structural” and “introductory” costs are specifically considered. The differences between manufactured products and services are highlighted, and the question is asked whether such differences warrant a separate costing system for service industries. Other approaches to cost allocation, such as TDABC, are considered.

A case study on ABC: The Mellow Company Case Study and Short ABC video

Topic 7: Customer Profitability Analysis
This topic moves the focus from analysis to action. Methods of finding profitable customers and products are considered, as is the area of account management and Customer Relationship Management (CRM). The topic also considers the impact of big data analytics and social networks on the company’s CRM, and how these have evolved into Social CRMs.

Case Study on Customer Profitability Analysis: Bank of Kew.
Topic 8: Process Control and Activity-Based Management
This topic discusses the areas of process control and activity management and shows how cost drivers obtained for cost allocations can be used as performance measures of process efficiency and effectiveness. Monitoring systems and the concepts of frequency, timeliness, and accuracy are also
considered, especially in relation to white-collar departments.

Case Study on ABM: Dilbert Laboratories – Discussion

Topic 9: Implementing Cost Analysis and Control Systems
This topic outlines the implementation stage of activity-based cost management systems. Behavioral aspects, especially in creating motivation are discussed. Long-term cost management models are also considered. The topic also considers the issues that arise when moving from ‘project’ to ‘steady state’; especially the factors that will ensure the long-term sustainability of a reengineered ABC system.

Case Study on Implementation: Oakley Paints
Topic 10: Strategic Performance Management Systems
Environmental and Social Management Accounting [also known as Corporate Social Responsibility (CSR)] is changing the way organizations go about their business. This topic explores what ESMA is, and what it means for organizations, now and in the future. The need for integrated management
accounting reports is discussed, and the impact of climate change and carbon emissions trading on cost and management accounting is specifically considered.

Topic 11: Environmental and Social Management Accounting
Environmental and Social Management Accounting [also known as Corporate Social Responsibility (CSR) and Triple Bottom-line Accounting (TBL)] is changing the way organizations go about their business. This topic explores what is meant by the “triple bottom line” and what it means for organizations, now and in the future. The need for integrated management accounting reports is discussed, and the impact of climate change and carbon emissions trading on Cost and Management Accounting is specifically considered.

Topic 11: Environmental and Social Management Accounting
Topic 12: Strategic Governance and the Strategic Audit
This topic first overviews the different approaches to corporate governance, which specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders, and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs.

The development of Enterprise governance systems, incorporating both structural governance and strategic governance are then compared and contrasted. Finally, it considers assurance issues using ‘leading’ rather than ‘lagging’ indicators, via the Strategic Audit.