Watlow Electric Finds Value in Lean Accounting: Manufacturer of industrial electric heaters and components offers best practices for implementation.

For Ed Grinde, business unit controller for Watlow Electric Manufacturing Co.'s Hannibal, Mo., operations, lean accounting (or "value stream management," as the company calls it) has been a boon. Click here to read the entire article.

Curbing Waste at Power Curbers by Tim Heston, Senior Editor, The Fabricator. June 2009. Headline: Equipment manufacturer streamlines part flow and drastically reduces WIP and raw stock inventory. They also fast-tracked their Lean Accounting implementation with help from BMA ...
Click here to read the entire article.

Go with the flow: secrets of business improvement by Ross Maynard, BMA Europe Senior Consultant. In this new article, Ross looks at one of the key lean philosophies, that of flow. He explores the assertion that: profitibility is related to the rate of flow ... Originally published in the UK journal Operations Management, v. 35, March 2009. Click here to read the entire article.

For Lean to Be Green the Performance Measurements Must Change by Brian Maskell, President BMA Inc., with help from Robert B. Pojasek, Ph.D. The authors posit that, for "lean and green" to be successful, environmental issues must leave the realm of the technical specialist outside the company's primary operations. "Lean and green" measurements have to be tightly integrated ... with continuous improvement processes.

Unleash the Power of Lean Accounting. Jan Brosnahan, Measurements and Controls Division Controller for Watlow Electric Manufacturing Co. has written an interesting article recounting her company's lean manufacturing and lean accounting transformation. Watlow, a BMA customer, put in place robust value stream management (VSM.) For Watlow, VSM resulted in better communication, reduced inventory and improved decision making. Click here to read the entire article.

How to Manage Through Worse-Before Better by Robin Cooper & Brian Maskell.
A New Article published in the MIT Sloan Management Review, June 2008. The authors point out that the lean transformation takes time and is full of obstacles ... one is the "crisis of confidence" that happens when financial performance does not imrpove quickly enough. You may purchase the entire article on the Sloan Review web site. Click here.

Knife Company Hones Competitiveness by Bucking the Status Quo. This article, by Tonya Vinas, was originally published by the Lean Enterprise Institute, June 2008. It recounts the lean success of one of BMA's customers, Buck Knives, in Post Falls, ID. www.lean.org.

Reflections on a Lean Accounting Project. by Ross Maynard, BMA Senior Consultant in our BMA Europe office.  Originally published March 2007 in "Quality World" (the publication of The Chartered Quality Institute, 12 Grosvenor Crescent, London UK)  Lean accounting also applies the lean philosophy to the finance process, radically stripping out transactions and complexity. This article reviews some of the lessons learned from an actual lean accounting implementation.

Count on Lean  by Ross Maynard, BMA Senior Consultant in our BMA Europe office.  Originally published March 2007 in "Quality World" (the publication of The Chartered Quality Institute, 12 Grosvenor Crescent, London UK)
Lean management is all about streamlining processes, localising decision-making, and eliminating waste. The accounting team is central to these efforts.  What does it mean to "lean" and organisation's accounting function, and where does this  leave the accountant?

Lean Accounting: What's it All About? "While Lean Accounting is still a work-in-progress, there is now an agreed body of knowledge that is becoming the standard approach to accounting, control and measurement. These principles, practices, and tools of Lean Accounting have been implemented in a wide range of companies ... (they) can be readily adjusted to meet your company's specific needs and they rigorously maintain adherence to GAAP ..." Brian Maskell & Bruce Baggaley."(Target® Magazine, 1st Issue, 2006, published by AME)

Lean Accounting: Novel Number Crunching
As wary as executives are these days of anything that smacks of "creative" accounting, there's a quiet revolution unfolding among lean manufacturers. The idea creeping into the heads of a few radical thinkers is that the financial numbers reported should actually reflect the underlying reality of the business.

Simplifying Financial Reporting:  Answers the question: "Do we need to Simplify Financial Reporting?" If you want a statement that is simple to prepare; easy to understand; easy to drill down to find underlying causes; easy to assign responsibility; easy to drive improvements, and one that is aligned with your lean strategy, then your answer is "yes".

Creating the Course and Tools for a Lean Accounting System.
This article was originally published in 2003 on the Lean Enterprise Institute web site.

Costing by Value Stream
by Bruce L. Baggaley.
Standard costs can be eliminated in favor of value stream costs because there is no longer a need to use standard costs for such decisions as order profitability, make/buy decisions, or inventory valuation.

Solving the Standard Costing Problem,
by Bruce Baggaley
Standard cost accounting presents a problem for lean companies. Its measurements motivate behaviors that are harmful to lean, and it does not provide reliable cost information for decision-making in a lean environment.

Value Stream Management for Lean Companies
by Bruce Baggaley.
This article provides a framework for implementing systems and controls more suited to the lean company

Lean Management Accounting
by Brian Maskell and Bruce Baggaley.
Lean Management Accounting brings together accounting, control, and performance measurement methods that support the introduction of lean manufacturing and sustain a lean enterprise approach over the long term.

#2: Quoting Decision Without Standard Costs

#3: Value Streams for a Retail Products Manufacturer

#4: Value Streams for Plants With Many Product Families

#5: Make-Buy Decision Using Value Stream Costing

#6: Making Money from Lean Improvement

#7: Making Pricing Decisions based on Lean Accounting

#8: Value Stream Costing & Decision-Making Lead To Significant Business Growth

#9: One Company Learns About Quoting & Sourcing

#10 Making an Accounts Payable Service Center a Little More Lean

Lean Sales and Marketing. The starting point of all lean thinking is a clear and profound understanding of how we create value for the customers through our products and services. The sales and marketing personnel are in the vanguard of this vital aspect of lean. Read this just-published article here ... more.

Are ABC and and RCA Accounting Systems Compatible with Lean Management?,
Review of an article from Management Accounting Quarterly, Fall 2005, Vol. 7 #1, p.12. Activity-Based Cost (ABC) systems have been around for many years but few lean organizations use them. In recent years new methods such as Resource Consumption Accounting (RCA) and grazplancostenrechnung (GPK) have been introduced.

The Lowdown on Lean Accounting,
an article from the AICPA journal of accountancy, July 2004

Lean Accounting & ABC:
In an article published in November, 2004, in the Harvard Business Review, Professor Robert Kaplan acknowledged what we in the business have known for a long time ... that Activity-Based Costing is too much work and too complicated for a company to use and sustain over time.

UK Aerospace Industry Promotes Lean.
This is a review by Brian Maskell after reading the new "Cost Competitiveness Report" out of the UK Lean Aerospace Initiative.

Lean Manufacturing and Cash Flow.
An article on the importance that the investment community places on cash flow from operations in evaluating the impact of lean.

Metrics for the Factory Floor.
Lean accounting can bring big long-term benefits in budgeting and capital planning. But a shift to new accounting philosophies can also create some short-term strains. By Marie Leone.

Review:
IMA's recently published SMA on Implementing Lean Production Fundamentals. This is an excellent introduction to the practical issues of lean thinking in manufacturing.