Lean Accounting is the technique which allows Finance to support Lean Manufacturing. Standard costing is designed for mass-production manufacturing, but is not compatible with the flow management promoted by the Lean Manufacturing. Lean Accounting actively supports Lean Manufacturing. Reporting is simplified, easily understood by operational people and is issued every week. There are no allocations and it takes into account the available capacity, which avoids erroneous conclusions . It is not impacted by inventory. It allows the cancellation of standards, which cuts down by 50 to 80% the number of transactions in the ERP (Enterprise Resource Planning). This decreases IT and audit costs. The traditional approach is to increase the dependence on ERP systems. Lean takes the opposite approach.
Thanks to Lean tools and Lean Accounting, Wiremold increased its value from $30m to $770m in 10 years: 2 points are highlighted in this article: reorganize around Value Streams and implement Lean Accounting
