Lean Accounting - Operations Involvement?

[DAB68]

Are there any companies in the Cove who are implementing lean accounting? Specifically, I'm curious if the accounting function is involving operations, or are they making changes unilaterally? Any description of how your efforts are going is appreciated as well.

[Stijloor]

In Reply to Parent Post by DAB68

Are there any companies in the Cove who are implementing lean accounting? Specifically, I'm curious if the accounting function is involving operations, or are they making changes unilaterally? Any description of how your efforts are going is appreciated as well.

Hello DAB68,

Have you looked at this? http://www.google.com/search?hl=en&q...=Google+Search

And this? http://www.vmec.org/files/lean_accounting.pdf

I am not in the accounting profession, but maybe this could be a start.
I'll continue to look around.

Stijloor.

[DAB68]

Stijloor - Thanks for the reply. I'm actually very familiar with the subject of lean accounting. What I've always heard from lean proponents is that accountants are a barrier. It's clear that a growing number of accountants are responding. My query is if operations professionals are taking advantage of the fact accountants are moving in the right direction and helping them find better ways to measure lean gains and motivate lean behaviors. What I hear from accountants is that they WANT to partner with ops, so I was guaging to see how many companies this is true of.

[Stijloor]

In Reply to Parent Post by DAB68

Stijloor - Thanks for the reply. I'm actually very familiar with the subject of lean accounting. What I've always heard from lean proponents is that accountants are a barrier. It's clear that a growing number of accountants are responding. My query is if operations professionals are taking advantage of the fact accountants are moving in the right direction and helping them find better ways to measure lean gains and motivate lean behaviors. What I hear from accountants is that they WANT to partner with ops, so I was guaging to see how many companies this is true of.

Hello DAB68,

Thank you for your excellent clarification. That makes absolute sense. I guess we'll have to wait for other Covers with this experience to respond.

Stijloor.

[duecesevenOS - 2009]

I've been trying to tackle lean accounting at our plant and I'm having trouble convincing our accountants.

I thought the paper presented in this thread was real important and really explained the problems faced with traditional accounting.

http://elsmar.com/Forums/showthread.php?t=22882

My explanation for what this paper states and what I have seen of accountants is this:

It is almost impossible to relate to an accountant that 1 + 1 does not always equal 2. I can not figure out how to quantitate the fact that when two people actively work together, the sum is greater than the parts. In addition, treating people like islands that have an assignable value actually demeans and lessens their value so instead of having 1 + 1 = 2 as accountants believe, results in an actual situation where 1 + 1 < 2.

Making 1 + 1 be greater than 2 with people is a large part of why lean practices work. It creates a culture of ingenuity and teaming. How do you get an accountant to grasp the value of that?

[DAB68]

I know there's still a large number of accountants that don't get it yet. It's slowly changing. The most encouraging sign, to me, is that the Institute of Management Accountants has written on the subject, and AICPA and FEI, support the discussion of lean accounting. Your accountants belong to these 3 organizations, so perhaps showing them that their own professional associations at least embrace the discussion might be helpful. Send them this link to IMA's official "Statements on Management Accounting" http://www.imanet.org/publications_statements.asp. Have them download articles with these titles "Accounting for the Lean Enterprise: Major Changes to the Accounting Paradigm" and "Lean Enterprise Fundamentals". Or perhaps print them yourself and give it to them. The fact that IMA understands this will likely help open their eyes.

Secondly, and I cautiously mention this at the risk of seeming "commercial", but there were over 500 CFOs, controllers, VPs of Finance, etc. at last year's Lean Accounting Summit. This year will meet or exceed that. When I told that to one CFO, his jaw dropped open as he realized he was falling behind.

There's also been 3 books published this year on the subject of lean accounting...
http://www.amazon.com/dp/1932159517/...pf_rd_i=507846

http://www.amazon.com/dp/0470087285/...pf_rd_i=507846

http://www.wcmfg.com/

My point is that operations needs to help accounting "get it right" because a growing number are responding. They'll eventually open their eyes, or become even more irrelevant.