10 Jan 2021

Lean Accounting – Target Costing

2021-09-16T04:42:21-04:00January 10th, 2021|Categories: Lean Accounting, Lean Learning, Lean Manufacturing|Tags: , , , , , , |

Cost-plus pricing can be fine when a lean manufacturer offers a standardized product with limited competition. Unfortunately, most manufacturers offer highly unique products or highly commoditized products. For these manufactures, target costing is a vital part of the product development process. Target costing involves understanding the needs and wants of customers, determining how much they are actually willing to pay for the value a product delivers, and defining the organization’s necessary profit before determining product cost.

7 Dec 2020

Lean Accounting – Capacity Management

2021-09-16T10:45:14-04:00December 7th, 2020|Categories: Lean Learning, Lean Manufacturing|Tags: , , , , , , |

Inventory management is vital to lean manufacturing success. On that note, before we can improve our inventory management processes it’s vital that we grasp a few basics. First, there are ultimately 3 different categories of inventory. Inventory accounts for all raw materials (RM), work in process (WIP), and finished goods (FG). Second, all inventory must be accounted for the manufacturer’s balance sheet, while all inventory changes must be accounted for on its income statement. Third…

19 Oct 2020

Lean Accounting – Lean Inventory Management

2021-09-16T00:03:09-04:00October 19th, 2020|Categories: Lean Learning, Lean Manufacturing|Tags: , , , |

Inventory management is vital to lean manufacturing success. On that note, before we can improve our inventory management processes it’s vital that we grasp a few basics. First, there are ultimately 3 different categories of inventory. Inventory accounts for all raw materials (RM), work in process (WIP), and finished goods (FG). Second, all inventory must be accounted for the manufacturer’s balance sheet, while all inventory changes must be accounted for on its income statement. Third…

24 Aug 2020

Lean Accounting Introduction

2021-09-16T10:48:48-04:00August 24th, 2020|Categories: Lean Learning, Lean Manufacturing|Tags: , , , , , , |

Many organizations find early in their lean journey that their accounting approach does not mesh well with lean thinking. While lean can help a company become far more effective and efficient by reducing waste, we should be able to account for those improvements. However, common accounting practices often fail to adequately measure lean improvements. An alternative, lean accounting approach is…

27 Jul 2020

Kaizen Event Roles

2021-04-22T09:30:02-04:00July 27th, 2020|Categories: Lean Manufacturing|Tags: , , , , , , , , , , , , , , , |

Kaizen events are team efforts requiring participants to perform certain roles. Thus, a key part of kaizen event planning is assigning roles for the kaizen event. In this article we introduce a a few common key kaizen event roles and requirements necessary to ensure a successful kaizen event.