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Accounting in the Lean Enterprise

2014-01-05

  • Author
    Gloria McVay, Frances Kennedy, Rosemary Fullerton


Welcome to our view of the lean world. This workbook is designed to provide a clearer understanding of the fundamentals of the strategic lean philosophy and introduces methods for providing relevant, timely, and actionable information to the decision makers in a lean environment. The workbook is divided into three major parts: I) Lean as a competitive strategy; II) Lean accounting; and III) Accounting controls and transition. Each section of the three parts walks carefully through the tools, activities, and philosophies of the concepts presented, as well as provide real-world examples and addresses often asked questions about lean implementations. It is our objective that upon completion of this workbook, company personnel will be able to transition a traditional accounting system into one that is supportive of a lean environment. We believe that this improved information system will enhance decision making, improve strategic communications, motivate correct behaviors, empower employees, and ultimately add to your bottom line. To give a real-life perspective, the lean journey of an actual company (pseudonym Lean Manufacturer of Electrical Components (LMEC)) with specific illustrations and examples provided throughout the workbook. We are using LMEC because it is a firm that has made significant strides in its commitment to lean as a company culture. LMEC is a particularly excellent choice as an example for this workbook because it was one of the first identified companies that recognized the need to change its accounting system in support of its lean initiatives. We are especially grateful to the LMEC plant controller and managers who have willingly invested their time and efforts in helping us to share their story—both the successes and challenges they have experienced in trying to build a lean culture. This workbook is unique in that it focuses on steps, checklists, worksheets, and examples to make it easier for companies to visualize and plan the transition to better information for lean decision-making. Actual company examples and problems address practical concerns. Finally, the workbook directly confronts the fears that are often the source of accountants’ resistance to change. These stumbling blocks include inventory management and valuation, SOX issues, GAAP compliance, and loss of control and benchmarks. Each fear is identified and resolved in an inset ‘Fear Box’ as the related topic is discussed. By the end of the workbook, the issues surrounding these typical fears should be understood, dispelled, and resolved.
About the Shingo Institute

Housed at the Jon M. Huntsman School of Business at Utah State University, the Shingo Institute is named after Japanese industrial engineer Shigeo Shingo. Shingo distinguished himself as one of the world's thought leaders in concepts, management systems and improvement techniques that have become known as the Toyota Business System. Drawing from Shingo's teachings and years of experience working with organizations throughout the world, the Shingo Institute has developed the Shingo Model™ which is the basis for several educational offerings including workshops, study tours and conferences. It also awards and recognizes organizations that demonstrate an exceptional culture that continually strives for improvement and progress. Those interested in more information or in registering to attend the 30th International Shingo Conference may visit www.shingo.org.