Purchasing from suppliers in potential trouble spots, such as part of Asia and South America, has increased significantly in the past few years as companies seek less expensive products to feed just-in-time inventory systems. In meeting these goals, companies tend to balance only cost and service as they try to get products of a specific quality within a certain amount of time for the least amount of money.
Acceptable downtimes in manufacturing industries are shrinking as businesses adopt Just-in-Time inventory systems, eliminate redundant operations and forgo maintaining adequate alternative capability and capacity that could otherwise facilitate timely shifts in operations.
Shank said these techniques are used in areas such as just-in-time inventory systems. He added, "The manufacturing and distribution world is changing, and there are new management accounting techniques to keep up with it.