Although its title suggests that it is about accounting only, the authors deal almost as much with how to manage perceptions, progress and processes in establishing lean operations to create a lean enterprise. In addition, the book is designed to allow you to apply its wisdom regardless of where you are in putting in learn manufacturing or services. You simply turn to chapter 18 to run a diagnostic to determine what you should be working on first . . . and what follows.
The book is like a finished diamond . . . each chapter exposes the beauty of another facet of lean accounting. While this creates a little redundancy, its necessary if readers are to be able to use this book by beginning at whatever stage is appropriate for them.
The book is also enhanced by a CD with templates of the formats discussed in the book.
I was particularly impressed with the in-depth continuing example that covers all of the subjects in the book. It made the concepts much easier to understand.
The writing is clear, crisp, and practical.
I have seldom seen lean manufacturing proceed unless it had strong support and direction from the accounting and financial staffs. Yet most such staffs are not yet trained in how to play those roles. With this book, they can.
A key early problem is that traditional accounting will show a REDUCTION in profits when lean manufacturing is first begin. This is because inventories will be reduced, so burden on the reduced production will be higher. That's the opposite of the economic reality, where costs are actually being reduced while inventories become smaller. Many programs are killed at that point without understanding that the effects are temporary. With this guide, you can prepare the organization to anticipate and understand these effects.
The book goes on to give you a good way to decide when various accounting steps can either be dropped or simplified as lean manufacturing reaches the stage of being properly in control of your processes.
I particularly liked the way the book describes how the financial staff can shift its focus to identifying opportunities to enhance profits and cash flow further through lean manufacturing. There's also a good process for how all of the functions should work together to make more progress in this way.
The book is also illustrated with many photographs of actual measurements and controls in place for lean manufacturing. Although the reproduction of these images is often not very good, I think you will get the idea.
Bravo for Mr. Maskell and Mr. Baggaley! They've written a classic.
As I finished the book, I began to think about how many other processes in companies would benefit from this kind of careful measurement and redesign. New product development should be a prime example. Perhaps the authors will take on another such subject in a future book. I hope they will.
It is a practitioners' book. It focuses on creating customer value, which is the key principle of lean thinking. The book can be read in the traditional fashion - front to back. The authors tell us, however, that is not how it was written. Their starting point is their "Lean Accounting Diagnostic," found in the appendix. It assesses your company's progress with Lean Accounting and helps develop a plan to implement change.
A case study runs throughout the book. It illustrates the conversion of the financial functions required at each step to support the endeavor.
The book is well-written and comprehensive. For those looking to support lean processes, it is a must read.