By McVay, Gloria; Kennedy, Frances; Fullerton, Rosemary
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Additional info for Accounting in the Lean Enterprise : Providing Simple, Practical, and Decision-Relevant Information
Liker, J. , and M. Hoseus. 2008. Toyota culture: The heart and soul of the Toyota way. McGraw-Hill, New York. , and B. Baggaley. 2004. Practical lean accounting: A proven system for measuring and managing the lean enterprise. Productivity Press, New York. Solomon, J. , and R. Fullerton. 2007. Accounting for world class operations: A practical guide for providing relevant information in support of the lean enterprise. WCM Associates, Fort Wayne, IN. Chapter 4 Value Stream Costing When designing an accounting information and costing system, it is important to consider the function it plays in providing information for both financial and managerial accounting purposes.
All of the reported measures should be aligned with the overall strategic objectives of the facility. Companies will often report their overall performance measures in a box score format, as introduced by Maskell and Baggaley (2004). This performance reporting tool captures measures for three different areas: operations, capacity, and financial. 2. The box score is updated weekly, shows trends over several weeks, and maintains long-term goals. The performance measures on the box score should be limited to the few critical measures that will help achieve the company’s strategic objectives.
There is minimal inventory because product is only produced if there is demand, and work-in-process is not moved in large batches waiting to be processed. There is a noticeable “pulse” to production, often referred to as takt time—the production time required for each process to meet customer demand. Parts inventory is supplied only as needed through 32 ◾ Accounting in the Lean Enterprise: Providing Simple, Practical, and Decision-Relevant Information a well-designed kanban system. To be helpful in this environment, accountants should be supportive of the kanbans, with information that is visible, timely, and easy to understand.