Lean Measures and Decision Making (aka Accounting for Lean)
Note: Attendees will need to bring their laptop (sharing is allowed) and be prepared to dive into the numbers as this is a very intensive hands-on workshop; also, both days of this training must be attended.
Traditional accounting and managerial methods were designed to support traditional, mass production manufacturing. Lean manufacturing principles and methods require a new set of performance measures and accounting information to support the Lean enterprise. For example, Lean manufacturing is about eliminating wastes that include “overproduction”; but traditional accounting would say to maximize machine hours (building work-in-process inventory) to absorb overhead. Traditional accounting and Lean methods are often at cross purposes.
This workshop is designed for both manufacturing leaders AND their financial counterparts to encourage a greater level of alignment between Lean operations and accounting. It is highly recommended that CEO’s, CFO’s, Controllers, Directors of Human Resources, Operations Managers and other leaders from companies committed to Lean transformation (and usually into their Lean journey) attend this informative and valuable 2-day session as a team. It covers a wide ranging set of topics including Lean tools, organizational culture, value streams, and deep-dives into Lean business management practices through the lens of both the customer (operations) and the supplier of information (accounting).
This workshop will illustrate the value and competitive advantage of Lean principles and practices via a hands-on simulation that includes Lean’s impact on operations and financial statements. Implementing a Lean Business System typically sends the wrong signals and negatively impacts financial results during the early stages. Unlike traditional Lean simulations, this workshop will include financial statements for each stage of the simulation in both a traditional format and then a simplified “Plain English” Profit & Loss format in order to demonstrate the importance of alignment between operations and accounting. The workshop will clearly illustrate why traditional cost management techniques are often at odds with Lean thinking and provide answers on how to develop a set of financial reports, including “Plain English” financial statements that allow the user community to truly understand performance. Exercises will demonstrate how traditional transactional processing needs to be changed in lock-step with Lean changes occurring in manufacturing, and how a working partnership between operations and accounting supports an effective Lean transformation.
About the Facilitator:
Jerry Solomon has had a unique opportunity to implement Lean accounting and manufacturing techniques as he’s simultaneously held the positions of Chief Financial Officer and Vice President of Manufacturing at three middle market manufacturing companies. While CFO and VP of Manufacturing at PACE, Inc., an electronics manufacturing firm, Jerry led PACE’s Lean transformation resulting in customer lead-time reductions of 75%, productivity improvements of 64%, space reductions of 50%, quality improvements of 100%, and a doubling of inventory turns. In addition to the improvements taking place in manufacturing, the cost accounting system was simplified and the use of MRP for executing the production plan was eliminated in favor of a pull system with electronic links to all suppliers. PACE, Inc. was certified as a World-Class company by the Maryland World Class Manufacturing Consortium, the first and only company to be awarded this distinction in the Consortium’s twenty year history.
Before retiring in late 2014, Jerry was the Vice President of Hunt Valley Operations, for MarquipWardUnited, the largest division of the Barry-Wehmiller Companies Inc., the Western Hemisphere’s leading packaging automation and converting group. Prior to his leaving the company, the previous 10 years saw MarquipWardUnited’s converting division increase its operating income almost four-fold and doubled inventory turns.
Jerry holds a B. S. degree from Clarkson University, an M. S. degree from Michigan Technological University and an M. B. A. degree from the University of Chicago. He has authored 3 Lean books, two of which won the prestigious Shingo Award: Who’s Counting? and Accounting for World Class Operations as well as Leading Lean. He was the Maryland Lean Leader of the Year in 2013. He is a founding thought leader and subject matter expert in Lean Accounting and has been teaching and practicing Lean Accounting for the last three decades. Jerry was a long time board member of the Maryland World Class Consortia, is both a Shingo and AME examiner and is a frequent speaker at industry conferences.
Payment: Please make check payable to “VMEC” and mail to PO Box 12, Randolph Center, VT 05061-0012. To pay by credit card (VISA, MC, AMEX), click here.