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2020 | Book | 1. edition

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Management Accounting in Supply Chains

Authors: Andreas Taschner, Michel Charifzadeh

Publisher: Springer Fachmedien Wiesbaden

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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About this book

Companies more and more compete as integrated supply chains rather than as individual firms. Success of the entire supply chain (SC) determines the economic well-being of the individual company. With management attention shifting to supply chains, the role of management accounting (MAC) naturally must extend to the cross-company layer as well. MAC can make a significant contribution to SC success, but is faced with a multitude of problems and challenges when trying to do so.

Students both in supply chain management (SCM) or management accounting (MAC) respectively, are typically not familiarized with these issues. There is still a clear gap in higher education teaching when it comes to management accounting in a cross-company setting. This textbook wants to fill the gap. It targets students who are already familiar with the fundamentals of accounting and now want to extend their expertise in the field of cross-company (or network) management accounting – with supply chains being the typical case in point. Practitioners might draw valuable insights from the text as well.

This textbook has been developed for university courses conducted in English language, especially in Germany, Austria and Switzerland.
Additional questions via app: Download the Springer Nature Flashcards app for free and use exclusive additional material to test your knowledge.

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Table of Contents

Frontmatter

1. Supply Chains, Supply Chain Management and Management Accounting

Abstract

The chapter defines the key concepts of management accounting, logistics, supply chains, and supply chain management (SCM) and discusses the interrelations between them. Management accounting is the internal accounting system that supports managers in carrying out management tasks. Logistics, in turn, can be defined as managing the procurement, movement, and storage of materials, parts, or finished goods through the organization and its adjacent channels. The notion of supply chains extends the view beyond a firm’s organizational boundaries in order to include also those value-adding tasks and activities that are performed by external partners. Supply chain management comprises logistical tasks, but also includes information flows as well as financial flows across supply chain partners. The chapter closes by discussing the role of management accounting in managing supply chains.

Andreas Taschner, Michel Charifzadeh

2. Theoretical Concepts Relevant for Supply Chain Management Accounting

Abstract

The chapter outlines some theoretical concepts that have proven useful for tackling SCMAC-related questions. Knowledge of these theoretical concepts helps to find and to implement the most appropriate setup for collaboration across supply chain partners and provides the conceptual basis for explaining the different institutional arrangements that can be found between firms. The chapter discusses the view of the firm in neoclassical economics where the price mechanism guarantees that resources are allocated to their most efficient use. It further discusses the Coase theorem which stipulates that the choice between markets and hierarchies is determined mainly by differences in transaction costs. Transaction cost economics elaborates this idea further and examines under which conditions a transaction is more efficiently performed within a firm (vertical integration) or outside it, by autonomous market contractors. The chapter also discusses the basic tenets of resource-based theory as well as agency theory and provides a summary overview of what management accounting can learn from these concepts for managing supply chains.

Andreas Taschner, Michel Charifzadeh

3. Challenges in Supply Chain Management and Supply Chain Management Accounting

Abstract

The chapter provides an overview of the key challenges management accounting is confronted with in a supply chain environment. It outlines why and how cross-organizational collaboration differs from intracompany collaboration. Governance and coordination systems differ considerably between an individual firm and a network of multiple firms. Resource and task allocation, as well as surplus appropriation among partners, cannot be planned and controlled using the same tools that are applied at the single firm layer. Asymmetrical or even missing information seriously affects management accounting’s role as a central information hub for decision makers. Uncertainty and potential opportunism play a bigger role than in a single firm; trust might replace other coordination mechanisms that management accounting typically applies within the firm. Performance measurement becomes more difficult, because it is much less clear what needs to be measured and how such a measurement can be implemented in an effective and efficient manner across supply chain partners.

Andreas Taschner, Michel Charifzadeh

4. Cost Accounting in Supply Chains

Abstract

This chapter focuses on cost accounting, which is often considered to be the “multi-purpose tool” of any management accountant. The information that is processed in a company’s cost accounting system plays a pivotal role in managing the entire supply chain. In order to optimize costs across the entire supply chain, cost information needs to be exchanged between partners. The chapter discusses the challenges that are posed to cost accounting by the SCM philosophy as well as possible tools and concepts to overcome these challenges.

Andreas Taschner, Michel Charifzadeh

5. Cost Management in Supply Chains

Abstract

This chapter outlines how cost accounting forms the basis for pro-active management of cost and how cost management can be implemented in a supply chain environment. Cost management is the combination of all activities and tools used to influence cost in order to achieve company goals. It focuses on managing the cost level, the cost structure, and cost behavior of a company. Interorganizational cost management (IOCM) can be defined as coordinated efforts by supply chain partners to actively influence and reduce costs. The chapter discusses most of the important IOCM techniques, namely chained target costing, Kaizen costing, life cycle costing, and activity-based costing in supply chains.

Andreas Taschner, Michel Charifzadeh

6. Supply Chain Finance

Abstract

The chapter focuses on the “financial supply chain”, which can be viewed as the sequence of financial events and processes that take place in parallel to the commercial transactions between supply chain partners. Supply chain finance (SCF) is defined as the use of financial instruments, practices, and technologies to optimize the management of the working capital and liquidity tied up in supply chain processes for collaborating business partners. The chapter discusses working capital management in supply chains and collaborative management of the cash-to-cash cycle in a supply chain. Selected supply chain finance instruments and the role of SCF players are described in more detail.

Andreas Taschner, Michel Charifzadeh

7. Risk Management in Supply Chains

Abstract

This chapter addresses the importance of risk management in supply chains. Risk is defined as a (negative) deviation from a set target due to unforeseen developments or events. Risk management is the process of systematically identifying, analyzing, and responding to risks in an organization. Risk management is pivotal in supply chains, and management accounting is often involved by providing information on risks. Potential risk responses can include adapting the supply chain design (such as switching to a multiple sourcing strategy) or adding buffers and redundancies. In most cases, a collaborative approach involving the partners in the supply chain will be most effective in reducing the overall vulnerability of the entire supply chain.

Andreas Taschner, Michel Charifzadeh

8. Performance Measurement in Supply Chains

Abstract

There is hardly a business firm that is not engaged in performance measurement. In a supply chain context, performance measurement does not merely deal with the performance of a single firm. Bilateral relations and the performance of the supply chain as a whole are moving to the center of attention.

Performance measurement serves the attainment of business goals. Supply chain related goals are to increase efficiency, improve quality, speed, agility, and service focus. In order to emphasize the network aspect, the cooperation, the basis of trust and the exchange of information should be strengthened. The chapter provides a selection of performance measures and indicators for these performance characteristics, discusses their strengths and weaknesses, and their application in performance measurement systems.

Andreas Taschner, Michel Charifzadeh

Title: Management Accounting in Supply Chains
Authors: Andreas Taschner
Michel Charifzadeh
Copyright Year: 2020
Publisher: Springer Fachmedien Wiesbaden
Electronic ISBN: 978-3-658-28597-5
Print ISBN: 978-3-658-28596-8
DOI: https://doi.org/10.1007/978-3-658-28597-5