Accg Management

In companies with complex products and complex production systems it is hard to see economic consequences of activities made in production. In order to create a financially successful company there is a need to understand the economic consequences of decisions and actions in production. Consequently, there is a need for good transparency between the production and accounting/finance functions. The research project, of which this thesis is a part, is a cooperation between Linköping University in Sweden and GKN Aerospace Engine Systems. The research project started with Volvo Aero Corporation as a research partner but during the process the ownership of the company has changed to now be a part of GKN Aerospace and thus also the name has changed. Further on in this thesis the company will be referred to as GKN. The research project is concerned with the informational relationships between management accounting and operations management of manufacturing firms, particularly advanced manufacturing technology companies.
1.1 Practical background
As a result of the financial crisis in 2008 with the following downturn it became harder and more expensive for companies to get credit from banks and other investors. It then became more crucial for companies to use their own capital more efficiently. GKN is a company in the aviation and aerospace industry, which develops and manufactures advanced mechanical products. In cooperation with the worlds’ leading aviation and aerospace companies, GKN develops and manufactures components for aircraft engines as well as rocket engines. The aviation and aerospace engine industry is characterized by being capital intensive. When entering as a partner in new engine programs, companies pay high entry costs for research and development of new components and it is known that it will take several years to generate profit. Furthermore the aviation and aerospace industry requires expensive manufacturing equipment. Moreover, when...