Accounting in the lean enterprise : providing simple, practical, and decision-relevant information

THE FUNDAMENTALS OF LEAN AS A COMPETITIVE STRATEGY Principles of Strategic Lean Thinking Brief History of Lean Production Lean Thinking Lean Implementation and Management Lean Results Discussion Questions References Value Stream Management Introduction to Value Stream Management Defining Your Value Streams Problem Solving in Value Streams Value Stream Performance Measures Summary Discussion Questions References THE NUTS AND BOLTS OF LEAN ACCOUNTING Principles of Lean Accounting Accounting as Part of a Total Lean Business Strategy Lean Accounting vs. Accounting for Lean Traditional Cost Accounting in Lean Environments Lean Accounting Principles Value Streams Flow and Pull Customer Value Employee Empowerment Continuous Improvement Changing the Internal Accounting Reporting System Challenges to Implementing a Lean Accounting System Discussion Questions References Value Stream Costing The Motivation The Costing Plan Step 1: Identify Value Stream Resources Step 2: Design the Value Stream Statement Format Value Stream Statement Overview Value Stream Revenue Value Stream Costs Material Cost Conversion Costs Facilities Cost Step 3: Standardize Collection of Weekly Data Step 4: Compile the Value Stream Statements Step 5: Select the Reporting Mechanism Step 6: Test It! Step 7: Roll Up to Facility Statement Step 8: Obtain Feedback from All Statement Users Summary Discussion Questions Inventory Management Inventory Valuation under a Traditional Standard Costing System Inventory Valuation Using Lean Accounting Methods Transitioning to an Accounting for Lean System Monitoring of Inventory Levels Summary Appendix 5B: A Primer on Backflush Costing Discussion Questions References Capacity Management Capacity Management-An Overview Reporting Capacity Measures Determining the Box Score Capacity Measures Step 1: Collect Monthly Data by Cell for the Capacity Spreadsheet Step 2: Calculate Productive, Nonproductive, and Available Capacity Step 3: Determine the Bottleneck Cell Step 4: Transfer Capacity Measures of the Bottleneck Cell to the Box Score Step 5: Review with Management and Target Kaizen Possibilities Step 6: Tie Lean Improvements to Changes in Capacity and Improved operational Measures Step 7: Use Freed-Up Capacity to Improve Financial Performance Space Management Summary Discussion Questions Product Costs and Lean Decisions Throughput and Conversion Costs Standard Costing Method Throughput Method Product Pricing Decisions Product Mix Decisions Special Order Decisions Make vs. Buy Decisions Box Score Format Summary Challenge Discussion Questions Lean Planning An Overview of Lean Planning and the PDCA Cycle How Lean Planning Is Different from Traditional Planning Traditional Planning-The Annual Budget Lean Planning-A Different Focus and Process The Four Levels of Lean Planning Strategic Planning Hoshin Planning (Strategy Deployment)-Medium Term Sales, Operations, and Financial Planning (SOFP)-Short Term Steps in the SOFP Process The SOFP Schedule Weekly Planning Meetings Summary of Lean Planning Discussion Questions References Measurement Selection and Alignment Reasons for Change Identifying Measures Measures and Alignment The Process Level 1: Company Strategies and Goals Level 2: Value Stream Goals and Measures Level 3: Work Cell Critical Success Factors, Goals, and Measures Measurement Challenges in Projects and Knowledge Work Action Tracking Logs Summary Discussion Questions Measurement and Lean Behavior Impact of Traditional Measures Attributes of a Good Measure Technical Attributes Behavioral Attributes Cultural Attributes The Assessment Summary Discussion Questions CONTROLS AND TRANSITION Leaning Accounting Processes Eliminate or Improve? Step 1: List All Accounting Processes and Activities Step 2: Quantify Time and Resources Step 3: Perform a Customer Value Analysis Step 4: Consider the Cost and Impact of Change Step 5: Select the Activity or Activities for Change Step 6: Prepare an Action Plan Summary Transitioning to a Lean Accounting Reporting System Preparing to Transition Your Accounting System Steps for Making the Accounting Transition Step 1: Identify Value Streams and Associated Costs Step 2: Determine Appropriate Method for Valuing Inventory Step 3: Identify the Types of Accounting Reports That Are Necessary Step 4: Decide on Changeover Date Step 5: Other Issues to Consider Step 6: Review the Process Potential Obstacles in Transitioning Your Management Accounting System Benefits of a Lean Accounting System Summary Discussion Questions Appendix A: Glossary of Lean and Lean Accounting Terminology Reference Appendix B: Lean Measurement Assessment Instrument Performance Measure Assessment for the Lean Enterprise Background Purpose Directions Index