Lean Accounting Maturity Path – Lean Enterprise

As lean extends beyond the 4 walls of the factory and continuous improvement becomes a way of life, lean accounting

 

 

Box Score – Performance Measurements

  • The lean performance measurement linkage chart becomes the primary method to control the entire business.

 

Box Score – Capacity

  • The productive, nonproductive and available capacity analysis has been extended into all support and administrative processes
  • All continuous improvement planning use the capacity analysis to plan & measure the impact of continuous improvement initiatives

 

Box Score – Value Stream Costing

  • The company value stream P&L has replaced the traditional P&L for financial reporting and is produced from the general ledger software system

 

Transaction Elimination

  • Two operational transaction occur – receipt of materials and shipment of materials
  • There is no tracking of materials or inventory in software systems

 

Planning & Budgeting

  • Target costing is used in product and process design to link customer value to the business

 

Lean Decision Making

  • Target costing is used to understand customer value and drive continuous improvement

 

Inventory Valuation

  • Simplified inventory valuation methodologies using value stream costing are used. Inventory value is posted monthly using a journal entry.