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Is Lean Accounting Worth the Effort? How About $6 Million in Savings Worth.
Lean Enterprise Resource Planning L-ERP Five Proven Steps to Successful Lean Accounting Implementation

 
Glossary of Lean Tools

Tool
About the Tool
5 S
A methodology for organizing, cleaning, developing, and sustaining a productive work environment. Improved safety, ownership of workspace, improved productivity and improved maintenance are some of the benefits of 5S program.
Error Proofing
Error Proofing is a structured approach to ensure quality and error free manufacturing environment. Error proofing assures that defects will never be passed to next operation.
Current Reality Trees
Is a problem-analysis tool, aids to examine cause and effect logic behind our current situation.
Conflict Resolution Diagram
Is used to resolve hidden conflicts that usually perpetuate chronic problems.
Future Reality Diagram
Is a sufficiency based logic structure designed to reveal how changes to the status quo would affect reality - specifically to produce desired effects.
Inventory Turnover Rate
The number of times an inventory cycles or turns over during the year. A frequently used method to compute inventory turnover is to divide average inventory level into annual cost of sales.
JIT
A philosophy of manufacturing based on planned elimination of all waste and continuous improvement of productivity. It encompasses the successful execution of all manufacturing activities required to produce a final product.
Kaizen
The Japanese term for improvement; continuing improvement involving everyone - managers and workers. In manufacturing kaizen relates to finding and eliminating waste in machinery, labor or production methods.
Kanban
Kanban is a simple parts-movement system that depends on cards and boxes/containers to take parts from one workstation to another on a production line. The essence of the Kanban concept is that a supplier or the warehouse should only deliver components to the production line as and when they are needed, so that there is no storage in the production area.
Lean Metric
Lean metrics allow companies to measure, evaluate and respond to their performance in a balanced way, without sacrificing the quality to meet quantity objectives, or increasing inventory levels to achieve machine efficiencies. The type of the lean metric depends on the organization and can be of following categories; Financial performance, behavioral performance and core process performance.
LPI
Lean Performance Indicator is a consistent method to measure lean implementation effectiveness.
 
A Key Core Value Metric for Motivating Performance and Rewarding Team Performance Through the PIP Plus Incentive Program.
 
Indicator:
Real Time Performance, Continuous Improvement Implementation, Lean Sustainment, Waste Elimination and Profitability.
 
Goal:
An LPI Monthly Goal of 100 - Equates to 116.3% Value-Added Output Performance at Level C Lean Performance.
 
Formula:
Value Added Sales (Total Sales Minus Raw Materials, Sub-Contracting and Components) divided by Shop Rate Per Hour () Divided by Number of Hourly Shop Floor Personnel Divided by 2.
 
LPI Copyright © by ShopWerks Software - Jim Warren 2004 - 2009
One-piece Flow
One-piece flow or continuous flow processing is a concept means that items are processed and moved directly from one processing step to the next, one piece at a time. One-piece flow helps to maximum utilization of resources, shorten lead times, identify problems and communication between operations.
Overall Equipment Effectiveness
Measures the availability, performance efficiency, and quality rate of equipment - it is especially important to calculate OEE for the constrained operations.
Prerequisite Tree
Is a logical structure designed to identify all obstacles and the responses needed to overcome them in realizing an objective. It identifies minimum necessary conditions without which the objective cannot be met.
Process Route Table
Shows what machines and equipment are needed for processing a component or assembly. These tables aid in creating ordinary lines and grouping work pieces into work cells.
Quick Changeover
Quick changeover is a technique to analyze and reduce resources needed for equipment setup, including exchange of tools and dies. Single Minute Exchange of Dies (SMED) is an approach to reduce output and quality losses due to changeovers.
Standard Rate or Work
The length of time that should be required to set up a given machine or operation and run one part, assembly, batch, or end product through that operation. This time is used in determining machine requirements and labor requirements.
Takt Time
The time required between completion of successive units of end product. Tact time is used to pace lines in the production environments.
Theory of Constraints
A management philosophy that can be viewed as three separate but interrelated areas - logistics, performance measurement, and logical thinking. TOC focuses the organizations scarce resources on improving the performance of the true constraint, and therefore the bottom line of the organization.
Total Productive Maintenance
Total Productive Maintenance (TPM) is a maintenance program concept, which brings maintenance into focus in order to minimize downtimes and maximize equipment usage. The goal of TPM is to avoid emergency repairs and keep unscheduled maintenance to a minimum.
Toyota Production System
The Toyota production system is a technology of comprehensive production management. The basic idea of this system is to maintain a continuous flow of products in factories in order to flexibly adapt to demand changes. The realization of such production flow is called Just-in-time production, which means producing only necessary units in a necessary quantity at a necessary time. As a result, the excess inventories and the excess work force will be naturally diminished, thereby achieving the purposes of increased productivity and cost reduction.
Transition Tree
Is a cause and effect logic tree designed to provide step-by-step progress from initiation to completion of a course of action or change. It is an implementation tool.
Value added to Non-value added Lead time ratio
Provides insight on how many value added activities are performed compared to non value added activities, using time as a unit of measure.
Value Stream Mapping
Value stream mapping is a graphical tool that helps you to see and understand the flow of the material and information as a product makes its way through the value stream. It ties together lean concepts and techniques.
Value Stream Costing
Value Stream Costing methodology simplifies the accounting process to give everyone real information in a basic understandable format. By isolating all fixed costs along with direct labor we can easily apply manufacturing resources as a value per square footage utilized by a particular cell or value stream. This methodology of factoring gives a true picture of cellular consumption to value-added throughput for each value stream company wide. Now you can easily focus improvement kaizen events where actual problems exist for faster calculated benefits and sustainability.
Visual Management
Is a set of techniques that makes operation standards visible so that workers can follow them more easily. These techniques expose waste so that it can be prevented and eliminated.
Workflow Diagram
Shows the movement of material, identifying areas of waste. Aids teams to plan future improvements, such as one piece flow and work cells.

 
New Lean Tips:

The people aspect of lean is very important and many times over-looked as lean is about people and performance. Most manufacturing processes require people to be on their feet most of the work shift. While standing or walking on hard concrete floors all day can be a cause for management concern in this day and age of workplace safety issues and high medical costs. Especially at risk for problems such as Plantar Fasciitis (a condition of extreme heel pain) are people working on hard concrete surfaces.

 
The Lean Tip – Alert your staff to be aware of people starting to walk with a limp or holding one heel up while standing. A solution could be as easy as a shoe insert that elevates the heel slightly to relieve and re-distribute the heel pressure. For more information, check out this link, www.heel-well.com
AcuraBurden:  Calculate hourly costs vs. quoted rates in real time

SmartQuote: Be first to the customer with an accurate estimate

PIP Plus: Motivate employees to meet goals and incentives

LeanWerks: Process critical business data to increase throughput performance

LeanTrack: Track key business metrics with color-coded charts

Lean Accounting Consulting: Discover the benefits of value stream costing and lean shop management