Lean manufacturing was where lean thinking all started; dealing with daunting tasks and numbers pertaining to financial accounting, costs and budgets. With the capital and investments at stake, lean methods aiming for elimination of waste and toward self –regulation towards excellence cannot be sustained without a lean management accounting to prop it up.
What are the innovations of lean management accounting? These are accounting methods that are similarly lean. This means that these do not introduce any unnecessary step or a step that holds no value for the customers. It is among the elements in a lean company like target costing, lean budgeting, and financial accounting. It attempts to minimize, if not, totally eradicate transactions that are wasteful and just keep transactions that can give control of a value stream. Kanban, a visual technique to check is combined with simplified lean management accounting for procedural control. Kanban is akin to JIT (Just in Time) that mixes visual checkups to control as well as lean inventory and manufacturing. Fundamentally, lean management accounting is guided by the following goals:
*Make available information like cost control and performance measurement to the leaders of the company.
*Provide information that is relevant in making decisions.
*Find out the points where waste are generated that may be hard to identify using traditional costing system.
Thus, it would be practical to stay away from traditional accounting procedures to remain within the realms of lean thinking. Traditional accounting systems do not focus on value streams, but rather, on costing and budgeting of departments. It means they are not very necessary in making the value creation procedd. Instead lean management accounting combines accounting, control and performance measurement approaches. These in turn support lean manufacturing and sustain lean operations by using lean methods too. Accounting is concentrated on value streams and based upon the actual need to complete tasks and expenses. Meanwhile, it also facilitates pursuit of continuous improvement of the value streams.
Living up by the principles of lean thinking that build companies which are propped up by lean management accounting gets the warrant that it will not just be another craze, but something that will be sustained until profitability sets in.
