My second column described two changes that are needed to make traditional job costing systems more useful for digital printing companies.  First, these systems must be capable of measuring the costs of non-manufacturing activities as well as print manufacturing processes.  With some creativity, many print-specific MIS/ERP programs can be configured to provide this capability.  Second, an effective costing system for digital printing companies must enable managers to assign costs to “targets” other than individual print jobs and to combine cost data for different kinds of cost objects to create useful reports.  Print MIS/ERP programs will have to be modified to provide this capability.

These two changes, while important and needed, are essentially extensions of a conventional job costing system.  Recently, traditional costing systems such as this have been strongly criticized, especially by those who advocate the use of lean manufacturing principles and techniques.  Proponents of lean manufacturing contend that lean companies need an entirely new cost measurement system, one that more accurately reflects the real economics of lean operations.  This new approach is usually called “lean accounting,” and it is being used by a growing number of successful companies.  The question is:  Does lean accounting make sense for digital printing companies?

Lean manufacturing is the name used to describe a set of management principles and techniques that were originally developed by the Toyota Motor Corporation.  The essence of lean manufacturing is to produce only what can be sold and to produce it at the lowest possible cost.  The primary goal of a lean enterprise is to avoid waste.  In lean thinking, waste is anything that causes unnecessary or excessive consumption of economic resources, including excessive inventory, excessive movement (of products or people), overprocessing, uneven flow, and the performance of non-value-added activities.