Paper Sample on Managerial Accounting vs Supply Chain Management

Paper Type:  Report
Pages:  7
Wordcount:  1749 Words
Date:  2023-09-25


Managerial accounting can also be termed management accounting; it is a form of management or decision-making based on the business performance's financial or accounting parameters. On the other hand, supply chain management is all the planning and decision-making in and around the production process of a business. The production process involves the acquisition of raw materials and processing up to the point where the finished goods or service is offered to the customer (Miguel 134). This paper shall analyze the relationship between these two management components, which are crucial for successful business endeavors. To cover the scope and definitively capture the relationship between management accounting and supply chain management, we should first understand each concept of control on their own and their importance. After clearly defining and understanding what each management concept is all about, their relationship shall become apparent, and we shall appreciate how this relationship is vital to business success.

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More of the management theory on the supply chain is associated with analyzing and optimizing unique performance-linked concerns, down to individual performance measures (Burges et al. 725). There is no doubt that supply chains will, and should literally, be handled. Nevertheless, to control the supply chains, administrators must first grasp their supply chain, concerning specific content and knowledge flows and the broader context. In recent times, formally defined management accounting systems have been introduced gradually (Axelsson et al. 55).

Supply Chain Management

In manufacturing, supply chain management (SCM) includes the transport and storing of input goods, work-in-process production, and finished products as well as end-to-end order processing from source to the point of use. A supply chain is essentially a series of autonomous organizations linked to each other through the services and goods. They create value separately, and/or cooperatively to supply to the final customer. It is pretty much a generalized corporate term that brings value to the goods or services and provides them to its consumers. The philosophy and theory of company administration have experienced significant improvements and evolution over the last thirty years (Beske et al. 337). Many old ways of doing business were changed. Several innovative concepts and strategies were developed, including corporate process management, creative management, lean design, agile production, dynamic scorecard, and blue ocean plan. Supply chain management is, without a doubt, one of several current and well-grown management techniques that have flourished and grown immensely throughout all business sectors across the globe (Cullen 10).

The supply chain can be described as a collection of different firms that add value to specific goods and services, from their origin up to the point where they attain the utility required to be demanded by the intended consumers (Cullen 13). There are various main features in this description, which were used to describe a supply chain. Firstly, a supply chain is built, which can only be established if more than one business is involved. Secondly, the competing firms usually do not affiliate with the same company interests within a supply chain, and therefore there is a legal distinction between them. Last, these organizations are integrated into the shared effort to bring quality to the supply chain's mist of commodity movement. The resource flow to each organization falls in as the materials converted and go out as the product's additional value (Beske et al. 341).

Supply chain management permanently fuses the operation of demand and supply. This fusion uses numerous techniques and methods to interpret the whole process and function correctly at every phase of the cycle involved. That unit included in the project would reduce costs and help businesses boost their long-term results, while simultaneously generating value for their partners and consumers. This system can also mitigate the rates by eradicating unexpected expenses during movements and handling (Burges et al. 733).

The critical goal of supply chain management is to track and relate the production, delivery, and shipping of goods and services. Businesses with a firm and tight grip on their stockpiles, development, distribution, local products, and sales will do this. We can observe the movement of products, services, and information from the supplier to the customer. The image represents the flow of a good or service from the supplier to the manufacturing company, who forward it for delivery to the vendor. In addition, the manufacturer sends it to the distributor or seller, who then dispenses the goods to different shops from which consumers can conveniently get the product.

Just at the conclusion of a supply chain is the good or service which is produced for the end customer by the supply chain. Consequently, the underlying reason for creating a supply chain is based on satisfying the ultimate customer in the market. As a result, the degree to which a supply chain will represent the customer determines the strategic position in the market sector. It is reasonable that a supply chain is far more sophisticated in the real world than the one shown in Figure1. It is not just a “chain block," it's more of a "web" because you remember that there are typically several vendors and numerous consumers for each involved business in the line.

Five Necessary Steps That Capsulate the Supply Chain Process

Planning Stage

The preparation stage is the initial stage of the supply-chain process. We need to build a roadmap or approach to discuss how the goods and services can fulfill consumer expectations and needs. At this point, the preparation will concentrate primarily on implementing a strategy that will yield full benefit. A policy must be planned by the organizations to handle all the tools required to produce products and deliver services. Supply chain management is primarily oriented towards organizing and creating a series of criteria.

Developing Stage

The next phase, after planning, entails the development or procurement. At this step, we focus mainly on establishing a good partnership with providers of the unprocessed materials needed for production. This step requires recognizing reliable suppliers and evaluating various development methods for the commodity being shipped, delivered, and paid for. Firms must choose vendors to provide the goods and resources they need to produce their products (Cullen 43). Therefore, the supply chain managers need to build a set of costing, payment, and delivery systems with providers at this step and develop the methodologies for evaluating and monitoring interactions.

Manufacturing or Making Stage

The third stage in the supply chain management system is the manufacture or fabrication of goods that the consumer has ordered. The products are developed, assembled, checked, packed, and coordinated for distribution at this level. The supply chain manager's job is to plan all the tasks needed for production, processing, packaging, and distribution planning (Cullen 47). This phase is regarded as the supply chain's most metric-intensive element, at which businesses can assess product quality, the efficiency of the manufacturing process, and the productivity of workers.

Delivery Stage

The fourth step is the period of delivery. There the retailer supplies the goods to the buyer at the intended venue. This stage is essentially the distribution process, in which customer orders are approved, and the products are prepared for delivery (Otley 51). The distribution stage is also alluded to as logistics. Businesses collaborate to accept orders from clients, create a grid of storage facilities, select carriers to transport goods to consumers, and set up a payment-invoicing scheme.

Return Stage

The second and final step of supply chain management is called a return. At this point, the consumer returns faulty or broken products to the manufacturer. Here the businesses have to manage consumer demands and reply to their grievances etc. In several companies, this stage also appears to be a troublesome part of the supply chain (Axelsson 63). Distribution network managers need to develop a reliable and versatile network to take back faulty, incomplete, and additional goods from their clients and to promote the refund process for consumers who have issues with shipped products.

The Flow of Various Resources

The supply chain incorporates the flow of various resources from raw materials to the final consumer. The first resource is materials; it contains a seamless stream from the producer to the consumer. This flow is possible for manufacturers, suppliers, and retailers via various stores. The biggest challenge facing us is to ensure that the content moves rapidly as a product without any stoppage across different points in the string. The faster it travels, the easier it is because it lessens the company's cash period (Otley 57).

Another resource flow is information or data. This covers quote demands, procurement orders, monthly plans, technical adjustment demands, product grievances, and customer-to-provider feedback reports (Axelsson 67). From the producer's side to the customer's side, the information flow comprises business overview, bid, purchasing order validation, notes on deviation behavior, dispatch data, inventory monitoring, invoices, etc.

The final resource within the supply chain flow is money; money is the facilitator of the smooth flow of materials across the chain. The customers examine the order for its correctness on the premise of the invoices issued by the manufacturer. If the claims are valid, money flows from the customers to the producer in question. The movement of cash from the supplier side to the consumers is often detected in debit notes (Yu et al. 380).

Managerial Accounting

In management accounting, administrators use the financial accounting information provisions to educate themselves when agreeing on issues within their organizations that benefit their operations, managing and performing control tasks (Otley 46). Managers and other administrative personal plans short-term and long-term decisions using managerial accounting through both financial and non-financial information. In this way, decisions are backed by concrete metrics and processed data. Management accounting as practice disseminates to the following two areas:

Strategic Management

To promote the task of the accounting manager as a tactical collaborator within the company. The strategic management niche involves deliberation and decisions regarding long-term plans for an organization (Axelsson 47). Managerial accounting is crucial when determining the business's position to meet its long-term goals while maintaining efficiency and effective policies.

Performance Management

Improve the corporate decision-making process and monitor the organization's results. Performance management under managerial accounting keeps the firms in check daily.


Despite its prominence in many fields and its increasing expansion in corporate practice, only a reasonably limited management accounting work has been had until recently in supply chain management (SCM). This study paper focuses on the possible role which accounting information management can play in supply chain management. An opposite effect on management accounting (intra- and inter-firm) processes and uses of the supply chain operations can be anticipated through an alternate point of view.

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Paper Sample on Managerial Accounting vs Supply Chain Management. (2023, Sep 25). Retrieved from

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