The interfaces of operations management in accounting are many. Operations management supplies the accounting profession with the tools it needs to track relevant information, evaluate an organization’s processes, and lower costs. Inventory is a major concern for the accounting profession. Many different ways of managing inventory exist, but not all apply to the same companies. This paper examines the various ways the operations management field interrelates with the accounting field. Some of the areas discussed are inventory management, costs and costing models, just-in-time systems, material requirements planning, and total quality management. These areas are described and then related to the accounting function of business.

Keywords: Accounting/operations, Inventory control, Just-in-time/kanban, Material requirements planning, Quality

Accounting and operations management are two fields that go hand-in-hand. Accounting is generally thought of as tracking the performance of an organization, paying bills, and collecting money (Heizer and Render, 2001, p. 10). However, accounting is increasingly becoming more cru

heavily on timely delivery and strong relationships with suppliers. In a manufacturing company, the supplier is relied on to provide materials to the company just when they are needed for use. This high level of dependability causes the supplier to become somewhat of an extension of the manufacturing company. The sharing of information is the key to a successful relationship between a manufacturer and supplier. In many cases the manufacturer actually provides the supplier with its planned production schedule to better facilitate a smooth, constant flow of materials within a narrow timeframe. This constant flow allows the manufacturing company to place small purchase orders on a more frequent basis. Also, these orders are usually delivered directly to the production floor instead of storage, eliminating much of the space that inventory would occupy otherwise. As a result, the company can retain minimal inventories and be more flexible to changes in demand (Horngren, Foster and Datar, 2000, p. 719).

In the journal JIT purchasing and performance: an exploratory analysis of buyer and supplier perspectives, Dong, Carter, and Dresner analyze the costs involved in just-in-time purchasing from the standpoints of both parties. They suggest that just-in-time purchasing results in inventory costs being transferred from buyers to suppliers. As a result, buyers are the only ones who benefit directly from just-in-time purchasing; however, suppliers can benefit indirectly. In forming the model for analysis, the journal lists the following as the basic elements of a just-in-time purchasing strategy:

· Hire and retain workers who are multiskilled so that they are capable of performing a variety of operations and tasks.

· Aggressively pursue total quality management to eliminate defects.

The just-in-time concept is a widely-used, increasingly popular approach to the way businesses conduct their operations. From the accounting standpoint, just-in-time is extensively accepted as a means of eliminating waste, i.e. costs, from supply, production, and distribution. Just-in-time is an operations management concept that revolves around continuous and forced problem solving that drives out waste (Heizer and Render, 2001, p. 516). While other concepts relate only to specific aspects of an organization, just-in-time is an all-encompassing concept that spans the entire supply chain. It is therefore driven by final product demand, meaning each product is obtained, manufactured, and delivered in quantities needed just-in-time to satisfy demand. The view of just-in-time as a total system concept is thoroughly discussed in Total system JIT outcomes: inventory, organization and financial effects, by Claycomb, Germain, and Droge (1999).

Some topics in this essay:
Foster Datar, Heizer Render, Germain Droge, Carter Dresner, Hellsten Klefsjo, Wong Kleiner, Accounting Abstract, MRP Unlike, Just-in-time JIT, Kanban Japanese, operations management, just-in-time purchasing, material requirements planning, inventory management, total quality, material requirements, carrying costs, requirements planning, quality management, total quality management, just-in-time production, heizer render 2001, economic quantity, horngren foster datar, foster datar 2000,