ABSTRACT
Value stream costing is introduced when a company’s Lean manufacturing methods begin to mature. It reduces waste because it eliminates most of the transactions associated with cost accounting. Value stream costing provides relevant and timely information to the value stream team members. Value stream costing is simple; everybody can understand where the financial information comes from and what it means. Value stream costing does not require wasteful tracking of information, because the financial data is gathered and reported in summary form for each value stream, not for each production job or product. Unlike standard costing, we do not try to report the so-called actual cost of each production job. The value stream costs are reported each week using up-to-date cost information.
