What Is Lean Management In Today’s Business

Many business start ups eager to make it right in their investment are unsure about what is lean management. One really good question is what new things can it teach a business that has made it already and have been in action for a long time already. Must every new method be tried without discrimination even when the business is already comfortably successful?

 

What is lean management and what can it do to improve business operations? It is a new mind set that started in the late 80’s. It entails a lot of changes in almost all aspects of the value streams for customers. The approach is definitely easier to integrate if business is new or operation is small. Yet, it is sensible to adopt in big businesses that deal with voluminous assets and information systems, widespread operations, broad customer base, etc.

It does not simply intend to cut back on costs but it is a consequence enjoyed as a result. The customer remain the core of the business focus; their needs are attended to with haste and with quality services or products t a fair price. What is lean management conveying to its customers are better quality advantages that also work for the benefit of the business.

There are occasions when lean management could not deliver what it promises because certain links are missing to connect the traditional business to the new stream of values. Under this situation, what is lean management? The answer is in a form of a framework that defines the ways to do the transformation of the old practices in a traditional setting to the new modes of practices and methods.

The links must be guided by the principles of lean management. The framework must also be able to integrate sustainability strategies. What is lean management in terms of its four main principles to help streamline risks?

  • Eradication of wastes in the entire company is needed and not only on certain points. This is achieved by automating processes and getting rid of uncalled steps
  • Giving focus on people who have multi-skills and attitudes that work best for the interest of the company
  • Moving from the culture of “push demand” to “pull demand” that causes the typical mass production over lean production thus necessitating hard selling
  • Fostering quality control and excellence in the entire company.

What is lean marketing is a commitment towards achieving waste-free operation that is ideal for every business in this hard times.

Lean Management Accounting Supports Lean Companies

Lean manufacturing was where lean thinking all started; dealing with daunting tasks and numbers pertaining to financial accounting, costs and budgets. With growing business and accounting files are wastes that necessitate a turning around towards lean management to minimize waste and foster self improvement, thus the need for lean management accounting to support it.

What are the innovations of lean management accounting? These are accounting methods that are similarly lean. This connotes that there must be no introduction of any new step that have no added value for customers. It is an element that exist in a lean company along with other elements like lean budgeting, financial accounting and target costing.

Wasteful transactions are identified and eliminated while those that are lean and useful are retained. Lean management accounting is a simplified version that is controlled procedurally by visual techniques like kanban. Kanban and JIT (Just in time) and ISO 9001 are related concepts that are merged as a way to check and control certain processes like manufacturing that controls inventory. Basically, lean management accounting are guided by these goals:

  • Generate performance measurement, cost control and self-improvement information to decision makers
  • Gather and present relevant information that may serve as basis in decision making
  • Determine and specify waste points and wasteful practices that are hard to trace in traditional accounting system

To attain these and keep the company growth, there is a need to get away from traditional measurement and management. Traditional accounting systems do not focus on value streams, but rather, on costing and budgeting of departments. Therefore, they are not useful in managing the value creation process.

Instead lean management accounting combines accounting, health and safety auditing software, control and performance measurement approaches. These in turn support lean manufacturing and sustain lean operations by using lean methods too. Accounting is concentrated on value streams and based upon the actual need to complete tasks and expenses. At the same time, lean accounting supports the company on its effort of self-improvement.

By adhering to the principles around which a lean company is built along with lean management accounting support, management is guaranteed that lean thinking will not just be just another approach but a way to grow and be profitable.

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