value add not overhead the next 10...

10/13/2014

1

Value Add not Overhead The Next 10 Years

with

Jean Cunningham

• Founder and president

• Lean accounting / lean business management / lean office pioneer

• Former CFO, Lantech, Inc

• Former CFO, Marshfield Door Systems

Building LEAN Beyond Manufacturing

Productivity Press, 2007 Shingo Prize, 2008

Managing Times Press, 2003 Shingo Prize, 2004

© 2014 by Jean Cunningham Consulting All rights reserved

2

10/13/2014

2


3

Lean Accounting Transformation

Transactions

Analysis

Consulting

Analysis

Consulting

Transactions


4

10/13/2014

3

Simplify Transactions

• Simplify the transactional work

• Automate the Normal

- Intelligent Poke Yoke

- Process not functional thinking

Support

Change

Eliminate

Waste

Optimize

Information

FUTURE focus

REDUCE time and effort

ELIMINATE tasks


5

VISION: Finance/Accounting/IT/HR Value Stream

6 © 2014 by Jean Cunningham Consulting

All rights reserved

Process Improvement

Transactions

Business

Partner Infrastructure

Security

Legal Structure

Chart of Accounts

Hardware & Software

Sta

nd

ard

Wo

rk

Cash Operations

Benefits

Pay

Pro

ble

m S

olv

ing

Automation

Asset Utilization

Strategy

People Deployment

Performance Mgmt

10/13/2014

4


7

Toyota Production System

Source: Toyota

SAFETY

JUST-IN-TIME JIDOKA

Delivery Cost Quality

Standard Work

Stability (process, people) Mutual trust between employees and management

• Andon • Poka Yoke

• Continuous flow

• Takt Time • Pull system

Heijunka Kaizen Flexible manning system OEE 5S


8

10/13/2014

5

Accounting Information

• Expedite fees from suppliers

• Unit of measure issues

• Stock adjustments

• Rebate corrections

• Pricing errors

• Incorrect credit card #

• Wrong sales tax

• Unauthorized pricing deductions

• Unauthorized quantity deductions

• Mis-shipments

• Expedite fees to customers

• Unauthorized early pay discounts


9

0

10

20

30

40

50

60

Un

auth

ori

zed

pri

cin

g d

edu

ctio

ns

Un

auth

ori

zed

qu

anti

ty d

edu

ctio

ns

Mis

-sh

ipm

ents

Exp

edit

e fe

es

to c

ust

om

ers

Un

auth

ori

zed

earl

y p

ay d

isco

un

ts

Exp

edit

e fe

es

fro

m s

up

plie

rs

Un

it o

f m

easu

reis

sues

Sto

ck a

dju

stm

ents

Reb

ate

corr

ecti

on

s

Pri

cin

g er

rors

Inco

rrec

tcr

edit

car

d #

Wro

ng

sale

s ta

x

Defects

Accounting Info to Drive Process Improvement

Jidoka/Launch Problem Solving


10

10/13/2014

6


11

Quantity

• Service Design

• Service Design • Process Design • Equipment Design • Suppliers

• Service Design • Equipment Design • Operator • Scheduling

Value Add

Non-Value Add

Necessary

Oops

Quantity

Value Add

Non-Value Add

Necessary

Oops

• Bill of Material • Inspection • Purchase history

• Bill of Material • Inspection • Purchase History • Departmental Reports • Yield Factors • Setup data • Inventory

• Scrap • Obsolescence Who has responsibility

for them?

Material Cost


All rights reserved

What are the existing Metrics?

10/13/2014

7

Conflicts Between Accounting Practices and Life-Cycle Concept

0

20

40

60

80

100

120

Product Planning PreliminaryDesign

Detailed Design Production Logistics Support

Life

Cyc

le C

ost

s

Adapted from Benjamin S. Blanchard, Design and Manage to Life Cycle Costs, Portland, OR: M/A Press 1978

Life Cycle Cost

Cash Flow

Matched/ GAAP Cost

Low cash outlay in the product planning and design phases disguise their impact on total product costs


13


14

10/13/2014

8

Profit Model

Invested Capital • Fixed Assets • Inventory • Receivables

$

Fixed Resources Break-even Loss

Profit

Volume


15

Profit Model

Invested Capital • Fixed Assets • Inventory • Receivables

$

Break-even Loss

Profit

Accelerated Profit

Volume


16

10/13/2014

9


17

Questions & Answers

"The most dangerous kind of waste is the waste we do not recognize."

— Shigeo Shingo, engineer, teacher and author on improving manufacturing systems


18

10/13/2014

10

JCC Lean Business Management


All rights reserved

Lean Strategic Coaching

Business Process Kaizen Events

Lean Office Workshops

Lean Executive Sensei

Lean IT and IS Migration

Lean Accounting

Lean Financial Statements

Lean Metrics

Lean Human Resources

Contact


All rights reserved

Jean Cunningham

Email: [email protected]

Phone: 224.688.3504

10/13/2014

11

Value Add not Overhead The Next 10 Years

with

Jean Cunningham

Material is Copyrighted

value add not overhead the next 10...

Documents