Tag: lean accounting

BMA Webinar: Time is Money – Calculating Value Stream Capacity

January 30 @ 11:00 am – 12:00 pm

“Time is money” is an expression we’ve all heard or used many times. It means “don’t squander or waste time because it’s a valuable resource that needs to be spent wisely.” In lean companies, this is how lean leaders view time, as a valuable resource. Their focus is on getting all employees to spending more time serving customers better and less time on everything else. This means that in order to support lean, a lean management accounting system needs to measure time accordingly. This called capacity. 

In this webinar you will learn:

  • Why capacity needs to be measured
  • The standard work to calculate capacity
  • How to calculate capacity in manufacturing
  • How to calculate capacity in service
  • How to use a capacity measurement to drive profitable growth

Join Nick Katko of BMA on January 30, 2024, at 11:00 am Eastern US time for this free webinar, which will last one hour. 

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you. This webinar will be recorded and will be made available to everyone who has registered. We will send everyone who registered an e-mail link to listen to the recorded webinar. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Finance and accounting leaders, managers and team members and executives and owners of lean organizations.

Continuing Education Credits for CPAs: 1 hour of CPE credit (must attend live webinar)

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1

Free
To register:

Connecting Continuous Improvement to the Bottom Line

December 19, 2023 @ 11:00 am – 12:00 pm

BMA’s December Webinar – Connecting Continuous Improvement to the Bottom Line

In partnership with KPI Fire (www.kpifire.com) join Nick Katko of BMA on December 19, 2023, at 11:00 am Eastern US time for this free webinar, which will last one hour. 

It is well known that continuous improvement has a positive impact on the performance of any process or value stream. What is often not clear is the actual financial impact of one improvement event or a series of improvement events.

In this webinar you will learn:

  • The economics of lean.
  • The 6 possible ways continuous improvement can impact financial performance. 
  • How to measure continuous improvement operationally & financially.
  • How to integrate lean management accounting into a company’s continuous improvement system. 

KPI Fire is granting everyone who attends the live webinar the opportunity to win a free scholarship for one of Nick’s Lean Accounting Certification Courses, valued at $400. The winner will be drawn at random after the webinar. This scholarship is  proudly sponsored by KPI Fire (www.kpifire.com).

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you.  This webinar will be recorded and will be made available to everyone who has registered for it. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Lean practitioners, operational leaders, finance and accounting staff and executives and owners of lean organizations.

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1

Free
To register

The Real Relationship between Costs & Time

Posted on | by nkatko@maskell.com

One of the primary weaknesses of a product costing system is the fact that the longer it takes to make a product, the more it appears to cost. This is because the direct labor dollars associated with any product are calculated based on the direct labor rate multiplied by the standard production time. Additionally, overhead is calculated based on the direct labor dollars multiplied by the overhead rate. This appearance of a higher cost can lead to poor decision making regarding pricing, make or buy or product rationalization decisions. 

The product cost calculation makes it appear as if direct labor and overhead costs are variable, based on time to produce as the driver. In reality, direct labor is a fixed cost. Your full-time employees are paid the same no matter which products are produced. Likewise, just about all overhead costs are also fixed, meaning they don’t vary directly based on labor time.

In lean accounting, the relationship between costs and time is based on developing an understanding of what is driving time, or capacity. The time of your employees can be spent creating value (value-added capacity) or not creating value (non-value added capacity). The amount of time spent on each is a function of process performance, not people performance. The more non-value added activities there are in a process, the more people you will need.

Here is a simple example. If 50% of a value stream’s time is spent on non-value added activities, and you need to hire one employee, you will have to hire two employees to get the output of one because there is 50% waste in the value stream.

Your labor cost is a function of the amount of capacity you need, which is driven by expected demand and the amount of non-valued added activities in your value streams. Want to do a better job of managing your labor costs? Don’t focus on the direct labor of the products, focus on understanding capacity of the value streams.

If you focus on continuous improvement, you will eliminate waste and create capacity, which you can utilize to create more value (and more sales) or reallocate to not have to add more people (and add cost). That’s the economics of lean in action.

Conversations, not Conclusions

Posted on | by nkatko@maskell.com

One of the primary differences between traditional management accounting and lean management accounting is lean management accounting focuses on creating conversations, while traditional management accounting focuses on drawing conclusions.

In traditional management accounting, information about past performance flows upward in a company to accounting and executives, who draw conclusions about performance and dictate “changes” that need to be made. It is then up to the managers to implement the changes dictated.

Lean management accounting focuses on creating cross-functional, collaborative conversations about current operating and financial performance and how to improve both over time. These conversations focus on understanding the true cause-effect relationships between lean operating practices and financial performance. Box Scores drive this conversation.

The effectiveness of lean operating practices are measured by the Box Score’s lean performance measurements. Capacity measures how effectively a value stream is “spending its time” on productive, value-added activities or nonproductive, non-value added activities. Capacity also measures how much capacity is created by improvement activities – available capacity. The value stream income statement in a Box Score reports the actual revenue and actual costs of a value stream. 

The three components of a Box Score create conversations around questions such as:

  • What level of improvement is necessary to actual serve customers better and drive sales growth?
  • What is the financial impact of improving quality, delivery and lead times?
  • If we want to improve financial performance, what operational changes and improvements are necessary?
  • How do lean practices manage costs?
  • How can we increase capacity without increasing costs?
  • What is the operational and financial impact of a business decision we have to make?

The relationships between lean operating performance and financial performance are dynamic, not static. Understanding these dynamic relationships requires using PDCA to understand the root causes, and PDCA requires the right people to have a conversation and draw the right conclusions about root causes.

Want to ensure the success of a lean management accounting transformation? Don’t think of a Box Score as a method of reporting, think of it as a conversation piece to be discussed.

Webinar: Planning and Managing Value Streams

May 10, 2022 @ 11:00 am – 12:00 pm

Value Stream Management: Integrating Lean Accounting and Lean Practices

Part 2 – Planning and Managing Value Streams

May 10, 2022, 11:00 AM US Eastern time

Value stream management is the integration of lean accounting with lean practices into a holistic management system designed to serve customers better, improve productivity and improve financial performance.

A value stream management system is deployed at the value stream or business process level of a lean company and focuses on practices to control, improve, plan and manage any operational value stream or administrative business process – in any lean company, in any industry. 

In this webinar you will learn:

  • Planning value streams
    • Integrating lean accounting and Hoshin
    • Integrating lean accounting and financial/operational planning
    • Calculating long-term financial impact of lean
  • Managing value streams
    • Organizing the value stream
    • Lean decision making standard work
    • Standard work for leaders
    • Respect for people

Join Nick Katko and Mike De Luca on May 10, 2022 at 11:00 am Eastern US time for this free webinar, which will last one hour. 

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you. This webinar will be recorded and will be made available to everyone who has registered. We will send everyone who registered an e-mail link to listen to the recorded webinar. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Lean practitioners, operational leaders, finance and accounting staff and executives and owners of lean organizations.

Continuing Education Credits for CPAs: 1 hour of CPE credit (must attend live webinar)

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1 

Free
To register

Webinar: Controlling and Improving Value Streams

April 12, 2022 @ 11:00 am – 12:00 pm

Value Stream Management: Integrating Lean Accounting and Lean Practices

Part 1 – Controlling and Improving Value Streams

April 12, 2022, 11:00 AM US Eastern time

Value stream management is the integration of lean accounting with lean practices into a holistic management system designed to serve customers better, improve productivity and improve financial performance.

A value stream management system is deployed at the value stream or business process level of a lean company and focuses on practices to control, improve, plan and manage any operational value stream or administrative business process – in any lean company, in any industry. 

In this webinar you will learn:

  • Controlling the value stream
    • Performance measurements
    • Visual management
    • Team meetings
    • Lean problem solving
  • Improving value streams
    • Structuring improvement activities
    • Measuring improvement activities
    • Using improvement to manage costs

Join Nick Katko and Mike De Luca on April 12, 2022 at 11:00 am Eastern US time for this free webinar, which will last one hour. 

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you. This webinar will be recorded and will be made available to everyone who has registered. We will send everyone who registered an e-mail link to listen to the recorded webinar. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Lean practitioners, operational leaders, finance and accounting staff and executives and owners of lean organizations.

Continuing Education Credits for CPAs: 1 hour of CPE credit (must attend live webinar)

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1 

Free
To register

Podcasts – Practicing Lean Accounting

Posted on | by nkatko@maskell.com

Here is a list of podcast links where we discuss our new book Practicing Lean Accounting:

Podcast Links – Practicing Lean Accounting

Mark Graban

Nick Katko and Mike De Luca Talk About Practicing Lean Accounting

Stephen Dowling

Mark DeJong

Mike De Luca & Nick Katko: (EP 78) Accounting vs. Lean Accounting

Katie Anderson

Interview with Nick Katko & Mike de Luca: “Practicing Lean Accounting”

Gemba Academy

https://blog.gembaacademy.com/2021/11/25/ga-399-practicing-lean-accounting-with-mike-de-luca-and-nick-katko/

JIT Cafehttps://www.jitcafe.com/post/finance-meets-lean

Creating an Effective Lean Management Accounting System

February 8, 2022 @ 1:00 pm – 3:00 pm

Creating an Effective Lean Management Accounting System

A BMA online course

February 8, 10, 15, 17, 20022

1:00 – 3:00 PM US Eastern time

Pricing and Registration

  • Individual: $600 per person
  • Group discount 20% for 3 or more from same company

To register:

https://www.eventbrite.com/e/creating-an-effective-lean-management-accounting-system-tickets-252215853407

Course description

Creating an effective lean management accounting system requires the integration of box scores with lean practices into a holistic management system designed to serve customers better, improve productivity and improve financial performance. 

A lean management accounting system is deployed at the value stream or business process level of a lean company and focuses on practices to control, improve, plan and manage any operational value stream or administrative business process – in any lean company, in any industry. 

This course is more than a training workshop. It is designed to help you develop a specific action plan to implement a lean management accounting system. This course will use training, exercises, discussion and simple assignments between sessions as learning methods. 

What you will learn in this course:

  • Value stream organization
  • How to build a box score
  • Establishing daily lean management practices
  • Lean problem solving using box scores
  • Structuring and measuring continuous improvement
  • Developing and using lean performance measurements
  • Integrating lean accounting in operational management and decision making
  • Integrating lean accounting into Hoshin and planning activities
  • Managing based on respect for people

Course design:

  • Four 2-hour online sessions – training, discussion, exercises and reviewing assignments
  • Four 1-hour assignments to develop your action plan
  • One 1-hour online one-on-one session to finalize your action plan
  • Unlimited coaching with BMA between sessions

Self-paced learning option

Don’t worry if you can’t attend the sessions live. All sessions will be recorded. You can complete the course assignments at your own pace and set up convenient one-on-one coaching sessions to review your assignments. 

Who should attend:

  • Executives and owners
  • Finance and accounting
  • Lean leaders and operational managers
  • The best benefit from this course will come from a small cross-functional team attending

Course Schedule

Session 1: February 9

  • Training – Lean management overview
  • Training & exercises – Building a Box Score
    • Performance measurements
    • Value stream income statement
    • Value stream capacity
  • Assignment: Box Score assessment

Session 2: February 11

  • Review session 1 assignment
  • Training & exercises – Controlling the value stream
    • Performance measurements
    • Visual management
    • Team meetings
    • Lean problem solving
  • Assignment: Assess methods to control value streams
  • Improving value streams
    • Structuring improvement activities
    • Measuring improvement activities
    • Using improvement to manage costs
  • Assignment: Assess methods to improve value streams

Session 3: February 14

  • Review session 2 assignment
  • Planning value streams
    • Integrating box scores and Hoshin
    • Integrating box scores and financial/operational planning
    • Calculating long-term financial impact of lean
  • Assignment: Assess methods to plan value streams

Session 4: February 16

  • Review session 3 assignment
  • Managing value streams
    • Organizing the value stream
    • Lean decision making standard work
    • Standard work for leaders
    • Respect for people
  • Assignment: Assess methods to plan value streams

Session 5: Date & Time arranged: Review your action plan

$600 per person; $480 per person for groups of 3 or more from same company
To register

Webinar – Calculating and Measuring Value Stream Capacity

March 8, 2022 @ 11:00 am – 12:00 pm

Calculating and Measuring Value Stream Capacity

A primary outcome of continuous improvement efforts undertaken in a lean company is to create capacity. A company can use additional capacity to improve delivery, quality, lead time, productivity, cost, safety, and morale. 

In lean accounting, it’s important to have clear, intuitive measures of capacity to quantify the following: 

  • Capacity created due to improvements.
  • How the current capacity is being used: for activities that are value-added, non-value-added but necessary, or in some cases simply unnecessary.
  • If there is adequate capacity to deliver a product or service on time. 
  • Where there is available capacity and determine how it can best be utilized.
  • Where there is a lack of capacity and potential overburden as a result.

In this webinar you will learn:

  • Why capacity needs to be measured
  • The process to calculate capacity
  • How to calculate capacity in manufacturing
  • How to calculate capacity in service

Join Nick Katko and Mike De Luca of BMA on March 8, 2022, at 11:00 am Eastern US time for this free webinar, which will last one hour. 

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you. This webinar will be recorded and will be made available to everyone who has registered. We will send everyone who registered an e-mail link to listen to the recorded webinar. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Finance and accounting leaders, managers and team members and executives and owners of lean organizations.

Continuing Education Credits for CPAs: 1 hour of CPE credit (must attend live webinar)

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1

Register here

Webinar – Managing Costs with a Value Stream Income Statement

February 8, 2022 @ 11:00 am – 12:00 pm

Managing Costs with a Value Stream Income Statement

A value stream income statement is an essential analytical cost management tool for a lean organization. It presents revenue and expenses in a usable, easy to understand format for internal users, which allows them to establish the relationships between lean operations and costs.  

In this webinar you will learn:

•          The principles of value stream income statements

•          How to simplify the presentation of costs for analytical purposes

•          How to use value stream costs to achieve cost reduction over time

Join Nick Katko and Mike De Luca of BMA on February 8, 2022, at 11:00 am Eastern US time for this free webinar, which will last one hour. 

Don’t worry if you cannot attend the webinar live because of other commitments or the time of the live webinar is not good for you. This webinar will be recorded and will be made available to everyone who has registered. We will send everyone who registered an e-mail link to listen to the recorded webinar. 

If you have any questions about this webinar, please contact Nick at nkatko@maskell.com.

Who Should Attend: Finance and accounting leaders, managers and team members and executives and owners of lean organizations.

Continuing Education Credits for CPAs: 1 hour of CPE credit (must attend live webinar)

Field of Study: Specialized Knowledge

Advanced Preparation: None

Program Level: Basic

Delivery Method: Group Internet

CPE Credits Earned: 1

Register here