Teaching Lean Accounting chapter in Hansen & Mowen’s ... Target costing as a process to drive ......

Teaching Lean Accounting 9/22/2010 Lean Accounting Summit

Larry Grasso 1

TeachingLean Accounting

Larry GrassoCentral Connecticut State University

with

Lean Accounting

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Bruce Baggaley, BMA Associates

2011 Lean Accounting SummitSeptember 16, 2011

GoalsGoals

To promote Lean Accounting education by ...

Providing materials for classroom use.Creating a continually evolving, improving and expanding set of homework and test questions, problems and exercises.Creating community of accounting

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Creating community of accounting academics supporting each other in teaching (and researching) lean accounting, leading to continuous improvement in lean accounting education.


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Cause & Effect Diagram: Obstacles to Implementing Cause & Effect Diagram: Obstacles to Implementing Lean AccountingLean Accounting

3Grasso (2007) “Obstacles to Lean Accountancy”

Cause & Effect Diagram: Obstacles to Implementing Cause & Effect Diagram: Obstacles to Implementing Lean AccountingLean Accounting

4Grasso (2007) “Obstacles to Lean Accountancy”


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Educational Barriers to Lean AccountingEducational Barriers to Lean Accounting

Public Accounting firms exert influence on the curriculum.

CPA requirements dominate theCPA requirements dominate the curriculum.

Financial accounting emphasis for Ph.D.s leads to professors with a financial accounting emphasis.A ti f l k th

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Accounting professors lack the expertise to teach lean accounting.Instructional materials to bring lean accounting into the classroom are not available.

Why donWhy don’’t managerial textbooks t managerial textbooks cover lean accounting?cover lean accounting?

We don’t cover lean accounting because there’s no instructional material available.

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Problem: Lack of Instructional materials

Limited coverage of lean accounting in managerial t tb ktextbooks.

One chapter in Hansen & Mowen’s Cost Management BookLean Accounting Module in the Ansari & Bell series

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& Bell series

Counter MeasureQuestions and problems accompany Practical Lean Accounting second edition, allowing it to be used as a classroom text.

Multiple choice questions to reinforce reading and raise issues.

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Discussion questions to encourage deeper learning and thought about application.Problems and mini-cases to give the students “hands on” experience.


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Practical Lean Accounting 2nd Ed

Student questions and problems for all chapters accompanying the book on a

i CDcompanion CD.Suggested solutions also provided on the CD.

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MultipleMultiple--Choice Questions Choice Questions Purpose: to provide a quick check of comprehension as students read the h tchapter.

To prompt questions for classroom discussion.

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Essay Questions Essay Questions Descriptive questions on basic definitions and concepts to reinforce

h i P t idcomprehension Purpose: to provide a quick check of comprehension as students read the chapter.Questions requiring the application of lean concepts to stimulate class

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lean concepts to stimulate class discussion and deeper learning.Small computational problems to reinforce learning.

MiniMini--casescases

Extended detailed problems similar to the demonstration cases used in the b k t d t t l tibook to demonstrate lean accounting principles and practices.The students have the opportunity to compute the measures and box scores and use the results to make decisions

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and use the results to make decisions.


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Teaching Lean AccountingTeaching Lean Accounting

Do you sometimesfeel like this?

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Teaching Lean AccountingTeaching Lean Accounting

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...or like this?


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Lack of experience teaching Lack of experience teaching Lean AccountingLean Accounting

Many teachers lack training in lean management and lean accounting.management and lean accounting.Most teachers lack experience teaching lean accounting.Where can they turn for help?

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Countermeasure: Creating an online Countermeasure: Creating an online community of lean accounting teachers community of lean accounting teachers

Not merely a site for gaining access to the “Test Bank” for Practical Lean Accounting second editionsecond edition.An evolving collection of questions, problems and mini-cases for use in testing.A means to benefit from the experiences of others, and to share your own experiences f f f

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for the benefit of others.A place to share teaching strategies and lessons learned, to support continuous improvement.


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To apply tobecome abecome a member of

the teacher’s group,

click here.

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The sign up paths are under construction.See the updated version at the presentationSee the updated version at the presentationand obtain the updated slides from Larry Grasso.

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The teaching libraryThe teaching library

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Sample Chapter Library Sample Chapter Library

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Each chapter will have at least five files.An instructors’ guide.Multiple choice questions and solutions.Question & problems and solutions. There will also be a file for each mini-case and for each mini-case solution in chapters with mini-cases.


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Continuous ImprovementContinuous Improvement

Materials will be continually added and improved.

fExisting materials will be corrected, modified and improved based on comments from the community.Other teachers can submitted additional questions problems and cases to be posted.

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The authors of the additional questions, problems and cases will be identified and credited.

Discussion pageDiscussion page

Under construction

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DiscussionDiscussion

A place to ask questions about the materials, share classroom strategies

d t h i d hand techniques, and share experiences … good and bad.Threaded discussion with key words or topics so you can check past discussions as well as participating in

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discussions as well as participating in current discussions.

Link back to BMA websiteLink back to BMA website

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Possible Course SequencePossible Course Sequence1. Why is Lean Accounting Important?

Why Conventional accounting doesn’t work f th l i tfor the lean environment.What is Lean Accounting?Practical Lean Accounting, Chapter 1.

2. Maturity Path to Lean AccountingSymbiosis between lean accounting and

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Symbiosis between lean accounting and lean production.Just in time lean accounting.Practical Lean Accounting, Chapter 2.

Possible Course SequencePossible Course Sequence3. Performance Measurement &

managing by Value StreamIntroducing performance measures for lean production cells and value streams.Visual, operational vs. Financial measurement for control.Introducing the value stream concept and

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Introducing the value stream concept and the rationale for managing by value stream.Practical Lean Accounting, Chapters 3, 7, & 8.


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Possible Course SequencePossible Course Sequence4. Financial Benefits of Lean Production,

the Value Stream Box Score.Introducing the box score for summarizing the effects of lean improvements, showing weekly or monthly value stream performance, and supporting planning and decision-making.

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Practical Lean Accounting, Chapters 4 & Chapter 21 for Value Stream Cost Analysis. Chapter 9, value stream costing; Chapter 10 using the Box Score.

Possible Course SequencePossible Course Sequence5. Lean Accounting Processes &

ReportingEliminating wasteful transactions while maintaining control.Practical Lean Accounting, Chapters 5, 6, 12 & 14 (also chapter 20 if desired).

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Possible Course SequencePossible Course Sequence6. Lean Product Costs

Simple methods for getting useful product t i f ticost information.

Practical Lean Accounting, Chapter 11. Chapter 9 is a good lead-in if not covered earlier.

7. Target Costing

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Target costing as a process to drive improvement in the context of the value stream.Practical Lean Accounting, Chapters 16.

Possible Course SequencePossible Course Sequence8. Lean Planning

Lean sales operational and financial planning. A continuous planning process rather than an annual budget.Practical Lean Accounting, Chapter 13.Hoshin Kanri can also be discussed here.

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Course SequenceCourse Sequence9. Strategic Alignment

Linking performance measures to organizational strategy. Performance Measurement Linkage Chart.Practical Lean Accounting, Chapter 19.Could be appended to the performance measurement topic

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measurement topic.Hoshin Kanri can also be discussed here or with Lean Planning.

Course SequenceCourse Sequence10.The Lean Enterprise

Lean culture, lean thinking & expanding beyond the organizational boundaries – the wider value stream.Practical Lean Accounting, Chapters 15 & 17.

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Not covered: Value Stream Mapping, chapter 22


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Other MaterialsOther Materials

There will be a test bank of additional multiple choice questions, questions,

bl d t i t dproblems and cases on a restricted access website hosted by BMA, Inc.

http://www.LeanAccounting.net/this will be available late August.

f id d d

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see me for userid and password.


Statements on Management Accounting (SMAs) from the Institute of M t A t tManagement Accountants

Lean Enterprise Fundamentals (2006)Frances Kennedy & Brian Maskell

Accounting for the Lean Enterprise (2006)F K d & B i M k ll

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Frances Kennedy & Brian Maskell

Implementing Lean Production Fundamentals (Statement 4KK, Jan, 2000)

Arthur Andersen


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Modules from the Ansari, Bell & Klammer Series – Management Accounting: A Strategic Focus (Houghton Mifflin 2004)Strategic Focus (Houghton Mifflin, 2004)

last I knew

Management Accounting in the Age of Lean Production.

Theory of Constraints and Throughput Accounting

Target Costing

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Target Costing… and others that may be tangentially related to lean management

Value Chain & Strategic Cost Management

Measuring and Managing Capacity

Business Process Reengineering

Books & ArticlesBooks & ArticlesWho’s Counting? A lean accounting business novel

Jerrold Solomon, WCM Associates, 2003

Real NumbersReal Numbers

Jean Cunningham & Orest Fiume, Managing Times Press, 2003

“What is Lean Accounting”

Brian Maskell, BMA, Inc.

“Lean Accounting: What it’s all about”

Brian Maskell & Bruce Baggaley, Target, Vol. 22 #1, 2006, p. 35-43.

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“Lean Accounting: What it’s all about”

Frances Kennedy & Peter Brewer, Strategic Finance, November 20005 , p. 27-34.

“Unleash the Power of Lean Accounting”

Jan Brosnahan, Journal of Accountancy, July 2008, p. 60-66, 5p


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CasesCases

“Aero Gear, Inc. Performance Management, Cost Management & P d t C ti i L T iti ”Product Costing in a Lean Transition”

Larry Grasso, IMA Educational Case Journal, Sept. 2008, p. 1-10.

“Creating a Lean Enterprise: The case of the Lebanon Gasket Company

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of the Lebanon Gasket CompanyPeter Brewer & Frances Kennedy, Strategic Finance, September 2005, p. 45-53.

Teaching Lean Accounting chapter in Hansen & Mowen’s ... Target costing as a process to drive ......

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Transcript of Teaching Lean Accounting chapter in Hansen & Mowen’s ... Target costing as a process to drive ......