What is Lean Accounting?
Lean Accounting is an innovative method to obtain data, convert it into valuable information, and generate indicators that support the strategic plan of the company and understand the costs involved and key indicators of the company.
Lean Accounting provides a very simple way to understand where the costs are and where is the value. It is a complement for the correct implementation of Lean Six Sigma to understand the impact of the actions and projects that derive from it.
Lean Accounting provides:
Slender measurements, instead of the traditional ones.
Methods to identify the financial impacts of the improvements achieved with the methodology.
A better way to understand the cost of the products and the cost of each value chain (Value Stream).
New ways to make decisions related to price and profitability.
More efficient ways to make decisions between buying or manufacturing the product.
Procedures to focus the business around the value created for the clients.
Why implement Lean Accounting?
Some of the advantages of using Lean Accounting are:
It provides information to make better decisions.
Reduces time, costs, and waste by eliminating transactions and unnecessary administrative systems.
Identifies the potential benefits of lean improvement initiatives and focus on strategies required to achieve these benefits.
Motivate long-term lean improvements, by providing information and statistics with an agile approach.
It provides methods to identify the financial impact of lean manufacturing improvements.
It grants freedom to the company’s finance department to work on lean improvements.
New ways to make administrative decisions related to prices, utilities, clients, etc.
The specific applications are in the sense of improving processes, and that these are and to eliminate wasteful practices.
How to implement it:
Implementation can be summarized in the following steps, which will be definitive for an excellent conceptualization and a change of habits that will generate a new work culture.
Phase 1. Application: Create a continuous flow in pilot areas.
Phase 2. Administration by value chains.
Phase 3. Lean Organizations.
The Lean path requires a clear understanding of the current situation and having strategic planning and a committed and well-prepared management team.
The pilot stage helps us to realize what the implementation entails and to set an example, where we can learn from mistakes, we can get to know the personality of the organization and be able to prove to everyone in the organization the power of transformation.
In the value chain stage, the organizational structure becomes the basis of the implementation, because it establishes a way of working focused on processes instead of administrative departments, and then apply what has been learned, in all the areas of the organization. Logistics is also implemented and Lean accounting, which supports offering indicators and ways to make decisions based on results and relevant information.
The final stage is characterized by the fact that everyone in the organization has reached their goals, they now think of knowledge as one of the highest values, and a system of administration that allows the structure have the documentary control of problems, improvements, means of prevention, and everything that is relevant for the correct operation of the company has been established. Also, in a lean administration, the improvements in working conditions at every level indicates the firm commitment to provide value to society.
About Luis Socconini.
Luis Socconini is an industrial and systems engineer with a specialty in manufacturing and has a master’s degree in quality and productivity from the Monterrey Institute of Technology and Higher Education.
He is also a Master Black Belt and founder of the Lean Six Sigma Institute, with more than 17 years of experience in the implementation of the Lean Six Sigma philosophy aimed at improving productivity, efficiency and quality in companies and government agencies such as Bimbo, IBM, HP, Siemens, Parmalat, Tequila Sauza, Hershey’s, Sanmina – SCI and Zapopan City Government, among many others.
He has written the Best Sellers: “The 5’s in Action”, considered the best selling book in 2005, “Lean Manufacturing Step by Step” and “Lean Company: Beyond Manufacturing”, all edited by Editorial Norma.