Lean management is an applied philosophy that many manufacturing, service and government organizations have adopted to acquire the flexibility needed to meet new competitive challengeseliminating waste, enhancing production speed and pushing innovation. The objective of the approach specifically called "lean" is to respond rapidly to changing client tastes and to offer the most value possible at mass production costs. Lean enterprises are continuously improving to streamline their operations. The approach is extremely appealing to industrial companies. In recent years a number of management approaches with these same objectives have emerged under various names. Total Quality, Kaizen, Kanban, and Six Sigma are all solutions that work towards the same ultimate goal of the lean technique. This article describes the lean accounting approach that supports lean manufacturing.

There are basically two definitions of "lean"-a systematic approach to eliminate waste through continuous improvement, and a total business process, not just manufacturing. The measurement begins from once an order is taken to receipt of payment. And truly, "lean" is all about continuous improvement.

Value stream recognizes that company processes create excellence and customer-driven performance. We must understand, control, and manage our business through the processes or value streams of the organization. This includes three top-level value streams in manufacturing companiesthe "make product" value stream, the "design and problem solve" value stream, and the value stream that includes the company's transactions and controls. These value streams often extend outside of the company itself into the suppliers, the customers, and partner organizations.

The ideas of flow embraced by "leaners" have their roots in the Toyota Production System. Anything that interrupts the flow of products and services through the value stream and out to the customer is designated muda-or waste. We must study the value streams and achieve uninterrupted flow from the raw material stage to delivered products and services. We savagely eliminate waste from these processes.

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