|
Why the Continuous Focus on Lean Accounting?
Kitchener, Ontario --
May 14, 2004 --
By David Hogg
(As originally published in the HPM Weekly Update)
While there is a tendency for many to feel that they're "there" when it comes to Continuous Improvement - 5S, value stream mapping, plant layout, lean principles, etc. ... everyone agrees that moving ahead comes down to MEASURES.
In some of our best North American plants, there are subtle reminders on the wall, such as "What gets measured gets done", or "No measures, no quality" - plus remonders that of all the things one could measure, there are only a critical few that really make a difference. There's no doubt that measures drive behaviour - and there are no more powerful measures in an organization than financial measures.
Unfortunately, when standard accounting practices drive behaviours that bonus people for running machines for the sake of 'utilization' or that encourage the amassing of inventory for its ‘book value’ - we open the door to our competitors who smile as they quietly introduce Lean Accounting principles (or derivatives thereof) that attack and reduce transactions and the waste associated with them.
But paradigms that are many decades old do not die easily. It takes time to build confidence in the new paradigms. For that reason, we began three years ago to change when Brian Maskell (The author of “Making Numbers Count”, and “Performance Measures for WC Mfg".) first presented Lean Accounting to HPM, and the interest has been growing since then.
But changing culture is a big undertaking, which is why the current strategy to continue the flow of knowledge from top people like Bruce Baggaley and Brian makes sense. Especially now that several firms will be implementing it and will then be in a position to share it all with us in the fall at the Lean Roundtable.
In closing – here is the huge benefit… the excellence of the training has been increasing. The LA session at Hammond Power Solutions in Guelph (April 2004) caused seasoned manufacturers we talked with to ‘glow with excitement.’ One person who sat in on Brian’s first sessions was really pumped after this updated course, indicating that it now "all makes sense as I can see how Value Stream Mapping is the key and how to accurately cost it."
There will be much more on this subject to come - and if you want to be considered as a Pilot Site for a rare implementation opportunity in 2004 click here to learn more.
|
