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