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Making the Numbers Count, 2nd Edition

Name: Making the Numbers Count, 2nd Edition
Author: Brian H. Maskell
ISBN: 9781439886267

by Brian H. Maskell

June 2009

Intermediate to advanced

248 pages

5h 51m

English

Productivity Press

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Cover
Half Title
Title Page
Copyright Page
Table of Contents
Preface to the First Edition
Preface to the Second Edition
Chapter 1 The Proactive Accountant
Manufacturing in the Twenty-First CenturyCriticism of Accountants and ControllersThe Proactive AccountantAttributes of a World-Class Management AccountantTools and TechniquesThe Role of the Management AccountantSummaryQuestions
Chapter 2 Shortcomings of Traditional Accounting Methods
History of Management AccountingProblems with Management AccountingLack of RelevanceCost DistortionInflexibilityIncompatibility with Lean PrinciplesInappropriate Links to the Financial AccountsSummaryQuestions
Chapter 3 Lean Manufacturing
What Is Real Manufacturing?The Five Critical Issues of Lean ManufacturingIssue 1: QualityIssue 2: Just-in-Time ManufacturingShop-Floor Layout and Cellular ManufacturingSetup Time ReductionSynchronized ManufacturingInventory PullTotal Productive Maintenance5S Industrial HousekeepingVisual ManagementVendor RelationshipsIssue 3: World-Class PeopleEducation and TrainingCross-TrainingTransfer of ResponsibilitiesTeamworkParticipationIssue 4: FlexibilityProduct Mix and VolumeShort Lead Times and Make-to-Order ProductionNew Product IntroductionIssue 5: Value to the CustomerAgile ManufacturingEnriching the CustomerCooperating to Enhance CompetitivenessMastering Change and UncertaintyLeveraging People and InformationSummaryQuestions

Chapter 4 Simplification of Accounting Systems
Aspects of Traditional Accounting SystemsWhy Are Complex Systems Needed?The Lean ManufacturerNew Accounting GoalsA Four-Stage Approach to SimplificationStage 1Eliminate Labor ReportingEliminate Variance ReportingReduce Cost CentersStage 2Eliminate Detailed Job-Step ReportingEliminate WIP Inventory ReportingEstablish BackflushingStage 3Eliminate Work OrdersEliminate Month-End ReportingEliminate Integration with the Financial AccountsEliminate BudgetingStage 4Eliminate Traditional Cost AccountingEliminate Inventory TrackingEliminate the Accounts Payable Three-Way MatchUse Electronic Funds TransferSummaryQuestions
Chapter 5 Value-Stream Accounting
How Does Value-Stream Accounting Work?Labor CostsMaterial CostsMachine CostsOutside Process CostsFacilities CostsOther CostsPlain-English Income StatementsClosing the Books“Our Corporate People Need the Traditional Statement”Box Score: The Income Statement Is Not EnoughFinancial Benefits of Lean ImprovementAnother Way to Look at the Potential Benefits of Lean ChangeDecision Making without a Standard Cost: A Case StudyProduct CostingSummaryQuestions
Chapter 6 Value-Added Management
What Is a Process?Value-Added AnalysisDefinitions of Value-Added ActivitiesUses of Value-Added AnalysisProcess MappingBasic Method of Process MappingBasic Steps to Process MappingAnalyzing a Process MapRoot-Cause AnalysisProcess Improvement and ReengineeringSummaryQuestions
Chapter 7 Performance Measurement
Characteristics of the New Performance MeasuresWhat You Measure Should Relate Directly to Business StrategyUse Nonfinancial MeasuresMeasure the Process Rather Than the OutcomeMake Sure Measures Are Visually Presented Where the Work Is DoneVary Measures to Suit LocationsChange Measures over TimeMake Measures Simple and Easy to UseEnsure Fast Feedback of informationFoster Improvement Rather Than Merely MonitoringExamples of New Performance Measures at WorkMeasuring Delivery Performance and Customer ServiceMeasuring Process TimeMeasuring InnovationMeasuring ProductivityMeasuring FlexibilityMeasuring QualityMeasuring Financial PerformanceMeasuring Social IssuesImplementing New Performance MeasurementsStep 1: Write a StrategyStep 2: Set Goals and Objectives for Each Strategic IssueStep 3: List the Critical Success FactorsStep 4: Validate the Critical Success FactorsStep 5: Link the CSFs to Value Streams and Other Key ProcessesStep 6: Develop Key MeasuresStep 7: Pilot the New Performance MeasuresStep 8: Expand the Measures to the Whole Plant or CompanySummaryQuestions
Chapter 8 A New Approach to Product Design
What Is Wrong with the Traditional Design Approach?Concurrent EngineeringHow Concurrent Engineering Improves on Traditional DesignMethods of Concurrent EngineeringCross-Functional TeamsIntegrated ApproachDetailed AnalysisCustomer-Focused DesignTough-to-Reach TargetsRole of the Accountant in Product DesignTarget CostingValue EngineeringLife-Cycle CostingIncluding Usage Costs in Life-Cycle CostingCalculating Life-Cycle CostsQuality Function DeploymentVariety Effectiveness AnalysisRole of the Accountant in Variety EffectivenessContinuous ImprovementSummaryQuestions
Chapter 9 Implementing the New Approach to Accounting
Making the ChangesRead WidelyCultivate a Global ViewCreate a TeamLearn about Lean MethodsProcess-Map Your Departments ActivitiesGet Actively Involved in Lean ManufacturingVisit Other CompaniesImplementing the Accounting ChangesStep 1: Training in Lean AccountingStep 2: Kaizen Event Style Methods for Performance Measurements and Value Stream CostingStep 3: Kaizen for Box Scores and Decision MakingStep 4: Kaizen for Transaction Elimination and Inventory ValuationStep 5: Full Implementation of Lean AccountingStep 6: Sales, Operations, and Financial PlanningStep 7: Target CostingWhat’s an Accountant to Do?Define Roles of the Accounting DepartmentCross-TrainApply Lean Thinking in Your Own ProcessesEliminate ReportsMeasure Your Departments PerformanceIntroduce a 5S Program into AccountingMove Accountants into the Value StreamsVolunteer to Join Improvement TeamsUse Visual Systems in the Accounting AreasSummary
Interlude: Accounting Is Boring, but Controllership Is Not
Interlude: Bean Counters No More
South Central BellAutomatic Feed Company
Appendix: Accounting and Measurement Questionnaire
Instructions
References
About the Author
Index

Content preview from Making the Numbers Count, 2nd Edition

4 Simplification of Accounting Systems

It is a dangerous undertaking to recommend changes to a company’s systems, especially the accounting systems. These systems are often near and dear to the people who developed them and use them. Further, every company is different and has different needs. There is no one way to make these kinds of changes.

Having said that, this chapter presents an approach to the elimination and simplification of the accounting systems within manufacturing organizations. As discussed in Chapter 2, traditional management accounting systems are at best irrelevant to a world-class manufacturer, and they are often positively harmful. In any event, the accounting systems are very wasteful because they require huge amounts of ...

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Making the Numbers Count, 2nd Edition

by Brian H. Maskell

4 Simplification of Accounting Systems

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.