0
0
Learn how to minimize waste and create wealth in your organization through a lean accounting and management approach that improves profitability by streamlining operations. Combine the management, accounting, control and performance measurement methods needed to support leaner operations that sustain a leaner organization over the long term. Develop an action plan for accomplishing the transition to this lean accounting and management approach within your organization.
Objectives:
Prerequisite: Management responsibility in finance, operations or planning.
731275
Chapter 0 - Overview
This course presents an approach to creating and sustaining organizational wealth that combines the accounting, control, and performance measurement methods needed to support leaner operations that sustain a leaner enterprise over the long term. This approach focuses on the basic principles of lean thinking, lean financial and managerial accounting.
Elements of this approach include target costing, value stream management, capacity management, resource planning, and continuous process improvement. The course begins with an overview of the five basic principles underlying lean accounting and management and a general discussion of the procedures for applying those basic principles.
In this course we will address the implementation issues related to providing customer value through target costing, eliminating waste through value stream management, improving flow through capacity management, managing pull through resource requirements planning, and achieving perfection through continuous process improvement.
The final chapter describes the process of developing an action plan for implementing lean accounting and management and creating a balanced scorecard for measuring performance.
Chapter 1 - Lean Accounting and Management: An Overview of the Basic Principles and Procedures for Application
Chapter 1 will provide an introduction to, and an overview of, the five basic principles of Lean Accounting and Management: providing customer value through target costing, eliminating waste through value stream management, improving flow through capacity management, managing pull through resource requirements planning, and achieving perfection through continuous process improvement.
It will also present the vision for lean accounting, introducing the concept of focusing on valueadding functions while eliminating non-value-adding functions, and identify obstacles to lean accounting. The process of going lean will be discussed in terms of how it relates to removing obstacles, analyzing processes, simplifying systems, educating and training personnel, measuring performance, integrating activities, and deploying strategy.
Finally, an overview of a generic four-step blueprint introducing lean accounting and management throughout an organization will be presented, with each of the four steps identifying actions that must be taken and processes that must be in place before the organization can move on to the next step.
Chapter 2 - Lean Accounting and Management: Providing Customer Value through Target Costing
Chapter 2 will deal with providing customer value through target costing. It will focus on the need for every organization to understand what value their customers place on the products or services it provides as well as how this value determines how much money customers are willing to pay for those products and/or services.
Prices demanded by customers can be achieved at a greater profit when the organization understands what customers are willing to pay, how the required costs of these desired products and services can be determined, and how waste and the associated costs can be eliminated from business processes.
An overview of the target costing process and a discussion of how target costs are initially established and ultimately attained within the organization's strategic planning and product/service development cycles will be provided. Issues related to key organizational and extended enterprise participants, the role of the customer, major sources of information, and critical tools and techniques will also be examined.
Chapter 3 - Lean Accounting and Management: Eliminating Waste through Value Stream Management
Chapter 3 will deal with eliminating waste through value stream management. It will focus on the value stream as the entire flow of a product's or services' life-cycle. The organization can truly understand the waste associated with the manufacture of a product or the delivery of a service only by such a study and a clear understanding of the value stream - identifying the value-added steps and eliminating the unnecessary steps or waste. Lean accounting and management advocates a new perspective of the service chain; looking at the complete service delivery continuum versus looking at just an individual element. One of the outcomes is an elimination of waste from the entire value stream. Various tool and techniques are discussed in detail to assist you in your analyzing of your value stream.
Chapter 4 - Lean Accounting and Management: Improving Flow through Capacity Management
Chapter 4 will deal with improving flow through capacity management. It will focus on flow and removing variation as the significant key to eliminating waste. When the value chain stops moving forward for any reason, waste occurs. Because waste is caused by anything that interrupts the flow of products and/or services through the value stream and out to the customer, value streams must be studied.
The importance of a carefully designed flow across the entire value chain in order to minimize waste and increase value to the customer cannot be emphasized enough.
Capacity management will focus on the objective of creating a value-stream where the product or service never stops in the business process and where each aspect of production and delivery is fully synchronized with the other elements. We will start by defining capacity in terms of the resources available to meet the product or service demands of customers and by focusing on the cost of wasted resources.
We will then address issues related to making estimates of the costs associated with a unit of capacity, tracking and reporting on the utilization of existing capacity, and improving capacity utilization. Finally, we will discuss ways of optimizing capacity management at the short-term operating level, the intermediate-term tactical level, and the long-term strategic level.
Chapter 5 - Lean Accounting and Management: Managing Pull through Resource Requirements Planning
Chapter 5 will deal with managing pull-through resource requirements planning. It will focus on pull as a means of ensuring that nothing is produced ahead of time and builds up work-in-process inventory and stops the synchronized flow. Resource requirements planning (or for manufacturing, manufacturing resource planning) is a style of planning and control whereby production is "pushed" through the operations based upon a forecast and a schedule.
This approach emphasizes the idea that no product or service is provided until it is ordered by the customer. Great flexibility and very short cycle times are required for the achievement of this principle of lean thinking. Also required is a mechanism for letting each step in the value chain know what is required each day based upon meeting the needs of customers.
Chapter 6 - Lean Accounting and Management: Achieving Perfection through Continuous Process Improvement
Chapter 6 will deal with achieving perfection through continuous process improvement. It will focus on how lean organizations pursue excellence in both the short term and the long term. A review of the classic total quality management understanding of continuous process improvement will emphasize the need for the organization to revamp its critical processes in a way that makes the firm more efficient, more effective, and more adaptable to its own needs as well as the needs of its suppliers and its customers. In essence, the firm must refocus its attention away from organizational structure and onto business processes as a part of the value stream.
The five phases of business process improvement, as well as the methodology for implementing each phases, will be discussed. This will involve addressing activities related to organizing for improvement, understanding current business processes, streamlining current business processes, establishing measurements and controls, and implementing continuous process improvement within an organization.
Chapter 7 - Lean Accounting and Management: Developing an Action Plan for Implementation and Performance Measurement
Chapter 7 will deal with developing an action plan for implementation and performance measurement. It will serve as a capstone for the course by providing an action plan for implementing lean accounting and management processes and a Balanced Scorecard approach to measuring organizational performance.
The action plan will identify a specific sequence of steps and initiatives that should produce the optimal results. It will focus on finding the right leaders with the right knowledge to evaluate the value stream and create dramatic changes in the ways routine, everyday activities are carried out.
The action plan will show how the sphere of change must be steadily widened to encompass the entire organization and all of its business processes and procedures.For optimal results, this sphere of change must ultimately spread both upstream and downstream - one's value stream - far beyond the boundaries of the individual organization itself.
Because a Balanced Scorecard provides the most comprehensive means of measuring and evaluating organizational performance, this chapter will also describe and explain the four components of a balanced scorecard (Financial, Customer, Internal business processes, and Learning and Growth), identify methods for linking Balanced Scorecard measures to organizational strategy, and discuss procedures for constructing and implementing a Balanced Scorecard.
Chapter 1 - Lean Accounting and Management: An Overview of the Basic Principles and Procedures for Application
Learning Objectives
After completing this chapter, participants should be able to
Introduction
This chapter provides an overview of the five basic principles of Lean Accounting and Management: providing customer value through target costing, eliminating waste through value stream management, improving flow through capacity management, managing pull-through activities with planning, and achieving perfection through continuous process improvement. We will present the vision for lean accounting, introduce the concept of focusing on value-adding functions while eliminating non-value-adding functions, and identify the obstacles to lean accounting.
The process of going lean will be discussed in terms of how it relates to removing obstacles, analyzing processes, simplifying systems, educating and training personnel, measuring performance, integrating activities, and deploying strategy. Finally, an overview of a generic, four-step blueprint for introducing lean accounting and management throughout an organization will be presented, with each of the four steps identifying actions that must be taken and processes that must be in place before the organization can move on to the next step.
Basic Principles of Lean Thinking
In their book, Lean Thinking, James J. Womack and Daniel T. Jones identified and described the following five basic principles of lean thinking: value, the value stream, flow, pull, and perfection.
Value
Every organization needs to understand what value their customers place on the services and/or products it produces. Value determines how much money customers are willing to pay for those products and services. Prices demanded by customers can be achieved at a greater profit when the organization truly understands what customers are willing to pay for products and their features and services, and how waste (muda) and the associated costs can be removed from the value stream.
The principle of value deals with the value an organization provides to its customers. It is the complete package of products and services organizations use to serve their customers. The foundation to the principle of value is the customer's point of view. In line with target costing, this value translates into the price the customer is willing to pay for a product or service, which in turn translates into the product and service costs an organization must achieve in order to satisfy both its customers and its stakeholders.
An organization must begin its journey toward lean thinking by making a conscious attempt to define value as precisely as possible. This is accomplished by ignoring existing assets and technologies, rethinking the firm on the basis of service or product lines with dedicated product teams, redefining the role of the firm's subject matter experts, and looking for new ways to create value. Accurately identifying value is the critical first step in lean thinking.
Chapter 2 addresses the issue of providing customer value through target costing. A discussion of target costing focuses on defining target costing, describing the target costing process, and explaining its importance. Issues related to key organizational and extended enterprise participants, the role of the customer, major sources of information, and critical tools and techniques is discussed. Finally, a blueprint for organization-wide implementation of target costing will be presented.
Value Stream
An organization must focus on the value stream - the entire flow of a service or product's lifecycle. One must have a clear understanding of the value stream - where value is created, which steps are non-value added and create waste, and which steps are non-value added but are required for regulatory or legal reasons.
731275
Customer Service
Customer Service
Customer Service
Back to Browsing Products
