A student from the University of Tennessee at Chattanooga and a professor from Central Connecticut State University won 2012 Excellence in Lean Accounting Awards from the nonprofit Lean Enterprise Institute (LEI).
Clay Moerland, a graduate assistant at the university, won the student award for a lean accounting simulation that he worked on with professors. Faculty award recipient Larry Grasso, Ph.D., won for his work introducing lean principles to the curriculum at Central Connecticut State University.
The awards were presented by Chet Marchwinski, LEI’s communications director, at the annual Lean Accounting Summit, September 14, 2012, in Orlando, FL. About 220 executives and finance and operations managers from manufacturing and service companies attended the conference.
Making a Lean Leap
The awards, sponsored annually by LEI at the annual summit, recognize teachers and students who attended a previous summit then applied what they learned to class work. The goal of the award program is to bring the principles and practices of lean accounting into higher education.
Conference organizers said the lean accounting movement seeks a shift from traditional cost accounting practices to methods that accurately measure and motivate companies implementing lean management principles.
The shift is needed because traditional cost accounting does not accurately reflect the performance gains made when companies launch a lean transformation. For example, traditional financial statements do not reveal reductions in inventory or cycle times, or new-found capacity in operations produced by the transformation.
Traditional accounting practices also motivate the wrong behaviors in companies implementing lean principals. For instance, conventional efficiency metrics can motivate management to create excess inventory.
Lean Accounting Workshop
How to make the necessary changes in finance needed to support a lean transformation is the subject of LEI’s Lean Accounting Workshop, set for November 14, 2012, at LEI’s Cambridge, MA, office.
The session covers the logic, key principles, and methodology for creating a complete lean accounting system. The session is based on the successful, real-world lean accounting transformation performed by The Wiremold Company of Connecticut. It is taught by Orest Fiume, who was Wiremold’s vice president of finance during the transformation.
What is Lean?
The terms lean manufacturing, lean production, or lean management refer to a complete business system for organizing and managing product development, operations, suppliers, customer relations, and the overall enterprise. It requires less capital, material, space, time, or human effort to produce products and services with fewer defects to precise customer desires, compared with traditional modern management.
Toyota pioneered lean management as a complete business system after World War II. During the late 1980s, a research team headed by James Womack at MIT’s International Motor Vehicle Program coined the term “lean” to describe Toyota’s system.
Lean Community Resources
LEI offers a weekly newsletter with lean management news and resources such as case studies, webinars, interviews with executives on lean leadership, and an archive of essays by authors and lean management thought leaders.
Lean Enterprise Institute
Lean Enterprise Institute, Inc., was founded in 1997 by management expert James P. Womack, Ph.D., as a nonprofit research, education, publishing, and conference company with a mission to advance lean thinking around the world. We teach courses, hold management seminars, write and publish books and workbooks, and organize public and private conferences. We use the surplus revenues from these activities to conduct research projects and support other lean initiatives such as the Lean Education Academic Network and the Lean Global Network. Visit LEI at https://www.lean.org for more information.