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Who's Counting A Lean Accounting Business Novel (Winner of the Shingo Prize for Manufacturing Excellence) ReviewVery few companies in the United States use Lean manufacturing or service methods. Because of this, most people in business don't know much about Lean operations. Most especially, they don't know how accounting has to change in order to support and strengthen Lean operations. Who's Counting takes the fundamental messages about Lean operations and translates them into an easier to understand format for adjusting accounting to fit.In many companies that have started Lean operations, the effort was later abandoned because no one understood the accounting and earnings implications of a Lean transition until it was started.
These challenges include going from measuring and "controlling" after-the-fact with statistics that operating people don't find very helpful to real time measurements created and used by the operators, dealing with write-offs as obsolete inventory is discovered as inventory levels are reduced, absorbing an unusual amount of overhead costs as production drops along with inventory, and finding enough work for operating people to do after their productivity goes up by 50 plus percent. Along the way, the company has to run its old accounting methods while it adjusts to the new ones. There's a terrific amount of work involved for the accountants, and it doesn't go away. At the same time, they need to learn about Lean operating methods so that they can play a role in finding better process methods.
Who's Counting? exposes almost all of the issues that can affect accounting in the first two years of a Lean transition. From that point of view, this is a five-star book.
I found, however, that the book was a little light on explaining how the Lean transition would take place in operations. Most accounting people will need to read another book about Lean operations to fully understand the concepts.
The situation in the book will strike some as far-fetched, but it works well to expose the relevant subjects. Many companies start Lean transitions without understanding the implications for how operations will have to be adjusted. That's about the same as in the book where the Lean expert, Mike Rogers, fails to provide enough advance warning about accounting and earnings issues.
I especially liked the ways that Mr. Solomon showed how denial can play a role in slowing down progress . . . and that the motives of those encouraging Lean operations may not be totally pure (as shown here by Joe Reynolds, a member of the board).
As I finished the book, I wondered how companies could get a more realistic understanding of what the Lean development process is like for all of their people before starting. I suspect that many more Lean transitions would succeed if the decision-makers and essential implementers could do so.
Good luck with getting rid of "muda" ("waste" in English).Who's Counting A Lean Accounting Business Novel (Winner of the Shingo Prize for Manufacturing Excellence) Overview
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