Managerial account decision making - Essay Example

st 2008 financial crisis, the company began focusing on lean practices reducing time and cost in several of its processes and its outcome, subsequently, reflected in its annual reports right from 2009 through 2013. Starbucks is facing stiff competition from McDonalds Corp and Dunkin’ Brands Inc. The paper aims at exploring how Starbucks has been able to carve a niche through lean approach in the market place. As such, lean production is a new buzz word among companies vying for a place in a highly competitive arena.

Toyota, a popular Japanese auto manufacturer, is known to have pioneered the lean approach in their operations successfully. Taking clue from it, Starbuckss management focused on lean approach aiming at not only on waste reduction but also on how to reduce time on several processes. (Yunos, 2013). Carter(2014) argues that lean thinking firm focuses on customer value enhancement through carefully choosing work processes. That means lean thinking takes a diversion from the traditional approach eliminating non-value added activities such as procedures, policies in their work flow.

In a lean company, the most important parameter to consider is time. That means the lean organization focuses on time reduction methodologies. Work must flow continuously and uninterruptedly so that the cycle time of the entire value stream is reduced and throughput enhanced. Traditional firms focus only on crucial operations – all hidden or less important operations are neglected. However, in this process, less important operations interrupt the flow of work increasing customer lead time. Not only more time is consumed but cost also increases.

Lean organizations create and share information among employees and assess performance by measuring the cycle times and lead times of all activities. Jargon, (2009) argues that Starbucks Corporation began its business as the anti-fast food outlet. Scott Heydon, the Vice President of the company, is a major force behind lean thinking