Japanese Business Practices and

Advanced Management Accounting

Techniques
Introduction

Japanese Business Practices have

long been admired for their efficiency
and innovation. This presentation
explores the Advanced Management
Accounting Techniques employed by
Japanese companies to gain a
competitive edge. We will delve into
the secrets behind their success and
uncover the strategies that have made
them leaders in the global market.
The Kaizen philosophy is at the core of Japanese
business practices. It emphasizes continuous
improvement and empowers employees to
contribute ideas for enhancing productivity and Kaizen Philosophy
quality. By fostering a culture of constant
innovation, Japanese companies stay ahead of the
curve and maintain their competitive advantage.
Benefits
Reduced inventory
Efficient production
Cost savings

Limitations
Vulnerability to supply chain
disruptions
Reliance on efficient suppliers
Setup costs.
 STEPS

1. Identify Opportunities for Improvement

2. Plan for Change
3. Implement Changes.
4. Check and Monitor Effects.
5. Act on Results and Standardize the
Process.

PRINCIPLES

Continuous Improvement.
Employee Involvement.
Waste Reduction.
Standardization.
 Target Costing

Target costing is a technique

where costs are set based on the
market price at which a product
can be sold while still achieving
the desired profit margin. By
setting cost targets early in the
product development process,
companies can work toward
achieving cost-efficiency.
 STEPS
1. Market Research and Customer
Expectations.\
2. Determine the Target Selling Price.
3. Calculate the Target Cost.
4. Cross-Functional Collaboration.
5. Cost Reduction Efforts.
6. Continuous Monitoring and
Adjustment.

PRINCIPLES
Customer-Centric Approach.
Proactive Cost Management.
Cross-Functional Teams.
Lifecycle Cost Perspective.
 Benefits
Ensures products are priced
competitively.
Promotes innovation and cost-
consciousness.
Enhances customer satisfaction
through better value.Aligns
product development with cost
objectives.

Limitations
May be challenging to accurately predict
future market conditions.
Heavy reliance on cost data can
overshadow the importance of product
quality.
Continuous monitoring and adjustment are
necessary to meet cost targets.
 Total Quality Management (TQM) is a
comprehensive approach to quality assurance that
Total Quality focuses on continuous improvement, customer
Management (TQM) satisfaction, and employee involvement. Japanese
companies prioritize quality at every stage of the
production process, ensuring that products meet or
exceed customer expectations. TQM has been
instrumental in building the reputation of Japanese
brands for exceptional quality worldwide.
 STEPS
1. Customer Focus.
2. Employee Involvement.
3. Process Optimization.
4. Data-Driven Decision Making.

PRINCIPLES
Customer-Centric Approach.
Continuous Improvement.
Employee Empowerment.
Data-Driven Decision Making.
BENEFITS

Higher Quality
Defect Reduction
Customer Satisfaction

LIMITATIONS
Resistance to Change
Resourse-intensive
Cultural Shift Required
 Just-in-Time (JIT)
Manufacturing
Just-in-Time (JIT) Manufacturing
is a technique widely used in
Japanese businesses. It aims to
reduce waste and inventory costs
by producing goods only when
needed. By synchronizing
production with demand,
companies can minimize storage
and transportation expenses
while maintaining high product
quality and customer satisfaction.
 STEPS
1. Streamline Production Processes.
2. Implement Pull Production.
3. Establish Close Supplier
Relationships.
4. Continuously Monitor and Adjust.

PRINCIPLES
Minimal Inventory
Continuous Flow of Production
Close Supplier Collaboration
Efficient Setup and Changeover
Processes.
Benefits
Enhanced efficiency and productivity.
Reduced costs by eliminating waste.
Improved product quality.
Increased employee morale.

Limitations
May not be suitable for addressing
major, systemic issues.
Requires ongoing commitment and
resources
Cultural resistance to change can be
a barrier.
Conclusion

Japanese business practices and

advanced management accounting
techniques have propelled Japanese
companies to the pinnacle of global
success. The Kaizen philosophy, Just-
in-Time manufacturing, Total
Quality Management, Lean
Management, cost management
techniques, and the relentless pursuit
of innovation and technology have
been instrumental in their
achievements. By understanding and
adopting these practices, businesses
worldwide can enhance their
competitiveness and achieve
sustainable growth.
Thanks!

JALEEL
RIFAH
SAFWAN
SOORYA
RUFAID