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Were you working in managerial accounting in the 1980s? My own arms-length exposure at that time suggests that, however simplistic it might seem, the assessmen
by pwinnski 9y ago
Were you working in managerial accounting in the 1980s?
My own arms-length exposure at that time suggests that, however simplistic it might seem, the assessment in the article is correct. It might seem obvious that lowering inventory as a percentage of assets is good, but only if you look at that, rather than just seeing the top-line assets total go down.
This article seems to very accurately represent my experience.
- rat_1234 9y agoTo be fair, no I wasn't working in managerial accounting in the 1980s. Maybe what would help is if you could explain what metric a reasonable manager would measure that would get worse under JIT versus better. I guess maybe if your assets go down you could look more highly levered, but financial leverage isn't really something that a manager can affect anyway (more of a CFO level metric). All of the asset-oriented measures I can think of -- like asset turnover, working capital as % of sales, working capital as % of assets, WIP inventory as a % of total inventory, etc. -- would all improve.