Lean Accounting (1 Day Class)
Lean principles affect not just manufacturing operations but also every aspect of your business–sales and marketing, engineering, product development–and especially accounting. So if you are using lean principles to move from batch-and-queue production to flow, you're probably running into problems with your company's accounting system.
For instance, a common problem is for operations to report significant productivity gains that can't be found in the financial statements. Another is for profits to look lower as inventories are reduced, even though cash flow improves dramatically. The cause of these and other problems is the way traditional management accounting systems hide both problems and true improvements. Created in the early 1900's to support large batches, long lead times, and lots of inventory, traditional accounting systems create significant “false-negative” reporting distortions that can impede further progress in a lean business. To sustain a lean transformation, top executive and financial managers must know how to transform routine accounting practices to a new system that not only is lean itself but also supports lean practices.
This workshop gives you the logic, key principles, and a proven methodology to create a lean accounting system that accurately reflects the benefits of the lean transformation. This workshop is not an academic exercise. It's based on the successful lean accounting transformation performed by The Wiremold Company beginning in 1991.
Note: a copy of Real Numbers: Management Accounting in a Lean Organization will be provided to each attendee.
Participation in this workshop will allow you to:
- Learn the logic, principles, and methodology of a proven system that you can adapt and use to convert your company's traditional accounting system to lean accounting
- Learn how to create plain-English financial statements that can be used for decision making by nonfinancial managers
- Learn how to transform accounting from “bean counting” to a valued business partner providing meaningful information for decision making
- Learn how to eliminate waste from the accounting system so information is reported faster
- Understand lean as a business strategy that transforms the entire organization
This workshop will guide you through the necessary changes in finance needed to support a lean transformation. You also will learn the rules of a lean accounting system that replaces outdated traditional accounting.
- Introduction to lean accounting
- Lean business transformation
- Why doesn't traditional management accounting support lean
- Lean accounting requirements
- Common obstacles: Why companies try, but don't succeed
- Manufacturing principles to apply in accounting
- Batch to flow
- Push to pull
- Perform to Takt Time
- Performance measurement
- Key success factors
- Attributes of a lean performance measurement system
- Accounting practices
- Accounting processes
- Cost management
- Cost planning
- Cost control
- Cost accounting
- Financial Control
- P&L statement
- Inventory accounting
- Investment management: More than just a CapEx plan
- Road Map: How to get from here to there
Who Should Attend:
- CEO, CFO, COO, president, and all leaders of a company pursuing a lean transformation
- A team that includes the president, vice president of finance, and vice president of operations is ideal
Orry was vice president of Finance and Administration and a Director of The Wiremold Company, West Hartford, CT, which gained international recognition as a leader in lean business management in "Lean Thinking", by James P. Womack and Daniel T. Jones. Orry led Wiremold’s conversion to lean accounting in 1991 and developed alternate management accounting systems that supported the company’s entire lean business efforts. Orry has studied lean production in both the U.S. and Japan and has been a guest speaker at conferences around the world. He has taught workshops on management accounting in a lean business and given workshops on lean leadership to senior executives. Orry is the co-author of the 2004 Shingo Prize winning book Real Numbers: Management Accounting in a Lean Organization. He was also inducted as a Life Member of the Shingo Prize Academy.
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