Lean Accounting in an Automotive Components Manufacturer

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]Company[/custom_headline]
Our client is a middle-sized company in the automotive industry. It has two main business units: the After Market Division and the OEM Division.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Challenge[/custom_headline]
The company, due in part to its history, was already divided into Value Streams and had already started a lean transformation process. What was missing was an information system capable of measuring the results of this transformation.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Action[/custom_headline]
Our job had two goals: create a set of indicators, accepted by all parties involved (Operations, Accountants, etc), in order to measure Value Stream performances and allow management accountants to produce timely income statements by Value Stream according to the principles of Lean Accounting.

[custom_headline type=”left” level=”h2″ looks_like=”h4″ accent=”true”]The Results[/custom_headline]
Today every Value Stream has a similar set of indicators and these indicators are available for all those interested (Operations, Techical design, Management Accounting, Purchasing etc.). The indicators refer both to operational performances and to economic and financial results. They are available within 5 working days and the effort required to produce them is quite limited. Everybody in the company agrees that these indicators are very useful to guide and to monitor the improvement process: people working in each value stream can now constantly and effectively measure the effects of their actions.