Waste in industry, whether that is idle workers, poor processes or unused materials

are a drain on productivity, and lean manufacturing aims to eliminate these. The
motives behind this vary depending on opinion, from increasing profits to providing
benefits to customers.  However, whatever the over-arching motives, there are four
key benefits to lean manufacture:

 Eliminate Waste: Waste is a negative factor for cost, deadlines and

resources. It provides no value to products or services
 Improve Quality: Improved quality allows companies to stay competitive and
meet the changing needs and wants of customers. Designing processes to
meet these expectations and desires keep you ahead of the competition,
keeping quality improvement at the forefront
 Reducing Costs: Overproduction or having more materials than is required
creates storage costs, which can be reduced through better processes and
materials management
 Reducing Time: Wasting time with inefficient working practices is a waste of
money too, while more efficient practices create shorter lead times and allow
for goods and services to be delivered faster

1. Define Value - Lean manufacturing principles aim to add value to the end customer. It is important to
understand what the customers value in terms of their needs, what they really want, and what they are
willing to pay for.

2. Mapping the Value Stream - The second principle within lean is identifying and mapping the value
stream. In this step, the overall goal is to utilize the customer’s value as a reference point and locate areas
that correlate with their values. Any activities and processes that do not add value to the end customer are
considered wasteful.

3. Creating Flow - After removing the waste from the value stream, the following action is to ensure that the
flow of the remaining steps will run smoothly without interruption or delays. Some strategies for ensuring
that value-adding activities flow smoothly include methods such as re-configuring production steps,
leveling out the workload, or creating cross-functional departments.

4. Establish Pull - Inventory is one of the biggest wastes within a production facility. The overall goal of a
pull-based system is to limit inventory and work in process (WIP) items while ensuring that the requisite
materials and information are available for a smooth workflow.

5. Pursue Perfection - Waste is prevented through the achievement of the first four steps which include
identifying value, mapping the value stream, creating flow, and adopting a pull system. The fifth step,
pursuing perfection makes lean thinking and continuous process improvement a part of the organizational
culture. All employees should attempt to strive toward perfection while delivering products based on the
customer’s needs.

Cost audit is the verification of cost accounts to determine the accuracy of cost
accounting records. It is a means to ensure that cost accounting records are in
track with the costing principles, plans, procedures and objective. ... Check the
maintenance of cost books, accounts & records.21-Feb-2020

Advantages:
1. Saves Time and Money

Cost-saving is the most obvious advantage of lean manufacture. More efficient

workflows, resource allocation, production and storage can benefit businesses
regardless of size or output. Time saving allows for reduced lead times and better
service in providing products quickly to customers, but can also help save money
through allowing for a more streamlined workforce.

2. Environmentally Friendly

Reducing waste in time and resources and removing unnecessary processes can
save the costs in energy and fuel use. This has an obvious environmental benefit, as
does the use of more energy efficient equipment, which can also offer cost savings.

3. Improved Customer Satisfaction

Improving the delivery of a product or service, at the right cost, to a customer

improves customer satisfaction. This is essential to business success as happy
customers are more likely to return or recommend your product or service to others.

Disadvantages:

1. Employee Safety and Wellbeing

Critics of lean argue that it can ignore employee safety and wellbeing. By focussing
on removing waste and streamlining procedures it is possible to overlook the
stresses placed on employees who are given little margin for error in the workplace.

2. Hinders Future Development

Lean manufacturing’s inherent focus on cutting waste can lead management to cut
areas of a company that are not deemed essential to current strategy. However,
these may be important to a company’s legacy and future development.

3. Difficult to Standardise

Some critics point out that lean manufacturing is a culture rather than a set method,
meaning that it is impossible to create a standard lean production model. This can
create a perception that lean is a loose and vague technique rather than a robust
one.

Cost audit is a vital and continuous process that a company must execute
properly throughout its existence in the market. It deals with the complete
verification of the cost records of the company along with different types of
accounts. The main objective of cost audit is to track the cash flow in a
company and correct the instances where wrong data exists. To know what is
cost audit, you have to know about its functions, importance, and advantages.
1.
Efficiency Audit.

Efficiency Audit is directed towards the measurement of whether corporate

plans have been effectively executed. It is concerned with the utilization of
resources in an economical and most remunerative manner to achieve the
objectives of the concern.

2. Propriety Audit.

The propriety Audit is concerned with executive actions and plans bearing
on the finance and expenditure of the company. The auditor has to judge
whether the planned expenditure is designed to give optimum results.

3. Statutory Audit.

It is the compulsory audit that required maintaining the related books and
accounts of specified establishments. The chief aims of this type of audit
are that the government wants to ascertain the relationship between costs
and prices.

Ensures Correctness Of  Cost Records

Cost audit is the examination of cost records and accounts maintained by the
company. It ensures correctness or arithmetical accuracy and gives clarity
about the cost accounting record. It provides valuable data and information to
the management, government, investors and to the public.
Identifies Loopholes And Frauds

It helps to detect frauds, errors and irregularities in cost accounting books. It

also identifies loopholes in the system and helps the management to discover
wrong practice. So, appropriate actions can be taken to eliminate errors and
irregularities.

3. Fixation Of Price

It determines the cost of production which helps the company to fix the selling
price of the product.

 Cost Control And Reduction

Cost audit provides accurate cost data which helps the management to take
appropriate steps to control unnecessary costs and wastage in the production
process. It helps to lower the cost of production which leads to increase in the
profit.
Beneficial For The Government

Government authorities use cost data and information to set reasonable price
of essential products and services. Cost audit also helps to determine the tax
rate.
Drawbacks Or Disadvantages Of Cost Audit

The main disadvantages of cost audit can be highlighted as follows:

1. Lengthy Process

It requires sufficient time, effort and resources to conduct cost audit. It may affect the daily
routine work of the employees and organizational activities. 
2. Expensive Process

Conducting cost audit may become very expensive because professional auditor charges
higher price for his work.

3. Not Applicable For Small Business

Because of the consumption of more cost, time, effort and resources, it is not
suitable for small firms having limited resources.
Chance Of Inaccuracy

Some portion of cost audit is based on the estimation which may give
inaccurate data and information in the audit report.