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How Accounting “Squirrels” Can Ferret Out Waste

by Jean Cunningham
March 15, 2019

How Accounting “Squirrels” Can Ferret Out Waste

by Jean Cunningham
March 15, 2019 | Comments (0)

While other functions are busy as beavers looking for waste during a lean transformation, your accounting and finance staff is like a squirrel with its head stuck in a yogurt cup. They only see and act on the traditional work that’s right in front of them instead of digging into data and transactions for buried “nuts” of waste, according to lean accounting pioneer Jean Cunningham.

She wants companies to let bean counters unwedge their heads, so they become squirrels that scurry around business and operational processes looking for those nuts and cracking them open.

“Until we create a picture of what they could do instead, they’re going to be stuck doing what they’ve always done,” said Cunningham, executive chairman of the nonprofit Lean Enterprise Institute and an innovator in applying lean production principles to accounting, finance, HR, and IT.

In a Lean Talk called “Value-Based Activities Using Financial Information,” she sketched what that new picture could look like:

  • Have accounting ferret out transactions of expediting fees paid to suppliers as a way of discovering which ones may have serious process problems. “Rather than looking at just how much did we pay, we could dig,” said Cunningham. Accountants “could open up the nut, and look in.” They’d discover what suppliers, what parts, and what locations were having on-time delivery problems. “Now, we’ve got information that could help inform some of our process-improvement activities,” she said.
  • Accounting could help improve employee engagement by determining which departments had the highest voluntary turnover rates, indicating that employees may not like the behavior of a leader or manager, who may need training in lean leadership.
  • Accounting could identify who works the most overtime and ask “why” to identify a possibly broken process making people work extra hours to finish tasks.

Accounting and finance also could identify opportunities for improving processes in order entry, product development, shipping, and manufacturing, as well as other areas, Cunningham noted.

“There’s all this kind of information locked away in our accounting systems that could be fodder for our transformation efforts, our process-improvement efforts,” she said. Get your accounting folks’ heads out of the yogurt can.”

Keep Learning

  • Watch the video to find out what happened to the squirrel stuck in the yogurt cup and get more ideas for involving accounting and in finance in your lean transformation.
  • Jean will deliver a plenary session at the 2019 Lean Summit, March 27-28, in Houston on “Next Gen Capability Development.” She’ll explore the challenge of how to develop people through continuous and deep learning. The Summit delivers practical, actionable ideas in plenary presentations, learning sessions, concise Lean Talks, in-depth workshops, and networking with lean practitioners facing the same problems you do. Go to https://www.lean.org/summit2019 now to register.

 

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