Lean Accounting
1 day (workshop) / Full Implementation depends on size of your
company
How many times do we hear that traditional accounting systems
are anti-lean and contribute to the lack of sustainment of the
transformation? This is due to the incompatibility of the
traditional batch and queue philosophy underlying standard cost
accounting and lean. Inevitably, companies along the lean
journey find that the emphasis in traditional standard costing
on labor efficiency and utilization promotes non-lean behavior:
building high inventories, large batches, building ahead, and
over-production.
Lean accounting is a series of methods and techniques that
provide accounting, control and measurement within companies
embracing lean, world class or agile manufacturing principles.
Underlying the methods of lean accounting are profound changes
from the traditional approach to accounting, control, and
measurement. These profound changes reflect the same ideas and
practical approaches used to implement lean thinking. Under the
heading of Lean Accounting are a number of the techniques that,
when used in combination, totally change the way a manufacturer
approaches the control of the company.
An organization that is seriously committed to the
implementation of lean or world class manufacturing methods must
also make radical changes to its measurement and control
systems. A new company vision for lean accounting must be
constructed that includes accounting personnel who are agents of
change and improvement within the organization. Financial and
cost accounting methods are stripped of their inherent waste,
bureaucracy, and complexity. A new view of the organization is
created that is thoroughly focused on the company's business
processes and include accounting functions and systems that are
totally integrated within the organization's operations.
Accounting personnel are then performing largely value-added
tasks in place of the routine drudge bookkeeping that was their
lot in traditional organizations.
Course Description:
Lean Accounting supports the transformation to a Lean
Enterprise. This workshop is intended to lead participants to
understand why traditional accounting is a problem, the
significance of the problem, and what they can do to change
their systems to promote the goals of lean. Every person in a
company that has undertaken lean manufacturing initiatives needs
to understand Lean Accounting Performance Measures. Decision
makers need to understand what information Lean Measures give
them and how to use it. Accountants need to know what
information to gather and how to integrate it into their
financial and overall reporting. Production managers need to
know what to measure and report. Floor personnel need to know
what parameters are being used to measure their performance.
Learning Objectives:
By the end of this course participants will learn how to:
- Recognize the problems in their own accounting systems;
- Create an implementation plan for lean accounting in their
companies;
- Take the first steps in the lean accounting maturity path
(incl., cell-level performance measures);
- Replace standard costing with value costing methods;
- Target operations transactions and financial performance
measures for elimination;
- Establish a financial framework for cost management by value
stream ;
- Measure the direct cost of the process, not just the people or
the full allocated cost;
- Measure outputs, not inputs; and
- Shift from historical-based, lagging indicators to leading,
predictive indicators.
Who Should Attend:
Value Stream Managers, Plant or Operation Managers,
Administrative Staff, Engineers, Supervisors, and Shop Floor
Employees.
Prerequisites:
The Lean Performance Metrics course and this Lean Accounting
workshop are designed to each stand alone, but at the same time,
provide high value to those who attend both. Those that take
both will gain a high-level overview with an interactive
discussion of the problems & solutions in the Lean Metrics
course and attendees will receive practical, in-depth, hands-on
practice in applying the Lean Accounting Tools.
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