Cornerstones of Cost Accounting 1st Edition by Don Hansen,Maryanne Mowen

تمرين 19

PROCESS IMPROVEMENT/INNOVATION
Refer to Exercise 12-10. Suppose that Honley attacks the root cause of the non-valueadded activities by establishing a totally different approach to procurement called electronic data interchange (EDI). EDI gives suppliers access to Honley's online database that reveals Honley's production schedule. By knowing Honley's production schedule, suppliers can deliver the parts and supplies needed just in time for their use. When the parts are shipped, an electronic message is sent from the supplier to Honley that the shipment is en route. When the order arrives, a bar code is scanned with an electronic wand initiating payment for the goods. EDI involves no paper-no purchase orders-no receiving orders-and no invoices.
Required:
Discuss the potential effects of this solution on Honley's bill-paying process. Is this process innovation or process improvement? Explain.