Operations Management ISO 9000 Standards Term Paper

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Another key difference is that the histogram measures an entire set of data, but does not reflect judgment on what components of that data are errors. In a typical histogram, only the outlying bars would represent errors. For a Pareto chart, the usage reflects that only errors are identified. In other words, you are starting with a subset rather than the whole set. The objective isn't to find out how frequently errors occur on the whole, but to identify the frequency of specific types of errors.

Because of the differences in their structure, histograms and Pareto charts are used to find different types of errors. Histograms measure the degree to which something is erroneous, whereas Pareto charts only measure the instances of error, not the magnitude.

5. Cost accounting has a strong relationship with lean production. One of the key tenets of lean production is the elimination of waste. The theory identifies seven concepts to help a company eliminate waste but does not provide one key thing - a means to identify waste. Cost accounting focuses on just that - identifying the costs associated which each activity in the production process. By analyzing the data produced by a cost accounting program, management gains the means to identify waste.

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The way that cost accounting can break down the operation by each process is critical to the identification of waste. In assembly line production, each particular process and system has a cost attached to it. Even the act of transportation goods from one work station to another has a cost in terms of time that could be used to actually add value to the product. The same goes for idle time - cost accounting provides a means for the company to measure the amount of waste that each task generates. This will help the company focus its waste reduction efforts, by allowing them to target the highest-wastes areas first.

Moreover, cost accounting provides companies with the tools to measure the effectiveness of their measures. Ideally, lean production strategies would yield results. That may not always be the case but even if we assume that it is, the magnitude of those results can only be determined through effective cost accounting. It is critical to the success of a lean production program that management be able to measure the effectiveness of its initiatives. This in turns puts significant pressure on the accounting team, because the effectiveness of the company's initiatives is dependent on….....

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