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Working with Your Controller to Ensure that Operational Excellence Generates Value


‐ Jul 21, 2010 3:10pm


Credits: None available.

The role of the accounting function in any organization is to provide timely, accurate and relevant information to internal and external stakeholders. As an organization transitions from traditional operational practices to a lean environment, the accounting practices are generally slow to follow. While performance excellence concepts increase operational efficiency and customer satisfaction, these gains are often hard represent in bottom line P&L savings. Key decision makers are often given confusing and contradictory information when evaluating performance excellence efforts.

One method that your accounting function can provide maximum value to the organization is to help answer the following questions:
· Do the cost savings identified during process improvement projects result in true bottom-line growth?
· Does the accounting group understand how existing metrics affect profit? Can they quantify the relative magnitude of each metric on cash flow? Is this understanding effectively communicated to management?
· Does your operations group understand how existing financial reports can be used to impact their daily responsibilities? Are your financial reports aligned with performance excellence efforts in manufacturing in the supply chain?
· Is an objective of the accounting group to provide management with the information to effectively, efficiently and safely minimize on-hand inventory and increase liquidity?

The alignment of accounting with the performance excellence culture of an organization is an evolution and generally occurs over 2-3 years time as it following milestones are achieved:
· Application of performance excellence to accounting operations
· Identification of strategic value streams
· Implementation of value stream accounting
· Plain English management reporting
· Lean external reporting

At some point in every journey for operational excellence, companies ask their finance team "How are we accounting for value creation?" In this session, your presenters will walk you through practical case studies to help you answer that question. The session will address:
· How the finance team can identify and validate the financial benefits of an operational excellence program.
· The creation and use of Value Stream P&L s as a straight forward format to understanding real costs associated with value creation.

Credits

Credits: None available.