GDC Total Business Solutions

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.

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.