There is no aspect of lean more important than Lean Accounting. When you boil it all down, the reason many of you are having a hard time getting support- upper management or otherwise – for lean is because people cannot see the savings. The reason people agonize over how to justify kaizen events or six sigma projects aimed at improving quality or customer service is because they cannot see the financial benefit. That is never going to change unless you get your company involved in Lean Accounting. Simply put, it is an accounting procedure that connects cash more closely with profits and losses; it drives metrics directly aligned with manufacturing excellence, and it collects cost along the value stream, rather than through some hierarchical cost accumulation and allocation scheme.
If you have a traditional accounting system, and your lean efforts are not showing savings, it is most likely because the accountants can’t find it in their bizarre costing processes. If you have Lean Accounting and you cannot find the savings, it is most likely because there aren’t any.
Tired of battling the financial world alone, the Lean Accounting thought leaders have banded together to launch an all-out assault on the financial community. A real Who’s Who in Lean Accounting has joined the effort, including Brian Maskell, Orry Fiume, Bruce Baggaley, Jean Cunningham, Jerry Solomon, Robin Cooper, Tom Johnson and Frances Kennedy. Jim Huntzinger, Mark Deluzio and Larry Grasso put together a grand conclave of sorts last week at Central Connecticut State University. Some of the people way out in front of lean have also joined the effort, including Doc Hall (who is as strong an advocate as any of the pure accounting folks), Richard Schonberger, Michael Bremer, Jamie Finchbaugh and Norm Bodek. They even let me join the fight.
This chart gives a pretty good picture of the m
magnitude of the task:
Different people have volunteered to after each of these groups. You can see it won’t be easy. But it is critical. If lean is going to take hold and turn our companies into long term survivors – long term winners, in fact – everyone engaged in lean in any capacity has to get up to speed on what Lean Accounting is all about. Just abut everyone of those names listed above can help you out with training or literature – or at least they can steer you to someone who can.
More important, you need to get your controllers and CFO’s to the Lean Accounting Summit:
Click HERE to find out all of the details.
Lean Accounting really is critical to the lean transformation. I am quite serious when I tell you that without it, your lean efforts simply will not work.