It has taken me a couple of days to come to a conclusion concerning the Lean Accounting Summit and to distill all of my thoughts into a central point. After such contemplation, I think the best way to summarize it is that the divide between public and private manufacturers is becoming quite clear.
Of course, the Summit was a great event. Attendance was at a record level. The quality of the speakers, the depth of the material, the number of success stories and the probing of the attendees was outstanding. There is no doubt that Lean Accounting is no mere fad, nor is it something only a few companies need. The companies that are serious about lean are serious about lean accounting. The heavy lean hitters – Womack, Bodek, Schonberger – all put on a great show. The real Lean Accounting wizards – Maskell, Bagley, Fiume, etc… – were also ready for prime time.
What I noted, however, is that the case studies, the successes, the companies that were knee deep into effective deployment of lean in general and lean accounting in particular, were all from the privately held crowd. The Fortune 500 attendees were in the minority and they generally lagged behind and talked of lean more from a theoretical knowledge than a practical one.
Every such event has its share of naysayers – people who are there because their boss made them, or they just wanted a company paid trip to Disney World – and the few of them I encountered all came from the big public company side of things. Just as many of us in manufacturing tried to avoid the turmoil of change twenty year ago by pointing out that Toyota is different, lean requires Japanese culture, lean doesn’t work in our environment, blah, blah, blah, there were accountants in attendance trotting out the same inane arguments. Just like all of us in manufacturing who took that silly position, the accountants will soon face the inevitability of lean accounting.
The energy at the Summit – and there was plenty of it – came from the smaller and medium sized companies that are well on their way to becoming extraordinarily lean, and who are pushing the boundaries of lean accounting, forcing all of us ‘experts’ to keep on our toes.
The bottom line? Lean Accounting versus old time standard costing has pretty well become the indicator of whether a company really gets lean or not. The big guys don’t get it, but a growing swell of small and mid-sized manufacturers do, and that is more than enough to convince me that the future of manufacturing is very good, indeed – just not for stock brokers.