5Measuring Capacity
Time Is Money
“Time is money” is an expression we’ve all heard or used many times. It means “don’t squander or waste time because it’s a valuable resource that needs to be spent wisely.” In lean companies, this is how lean leaders view time, as a valuable resource. Their focus is on getting all employees to spend more time serving customers better and less time on everything else. This means that in order to support lean, a lean management accounting system needs to measure time accordingly. This is called measuring capacity.
I consider measuring capacity one of the most vital components of a lean management accounting system. That is because it helps establish the true cause–effect relationships ...
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