Lean Accounting vs. Traditional Cost Accounting

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George King · Guest

<butcherdwayne@hotmail.com> wrote in message
news:115tlqghk46qg32@news.supernews.com...
Quote:
I'm looking for more info about Lean Accounting. I found a conference
that is devoted to the subject of Lean Accounting, but I'm not sure if
I should waste my time learning about it if it's not "going to stick."
Any thoughts? www.leanaccountingsummit.com/LA.

Try alt.accounting

George

xpyttl · Guest

"Wayne Lundberg" <Waynelund@worldnet.att.net> wrote in message
news:115vvh8pno6k3ea@news.supernews.com...

Quote: You are right. What I meant was to create a system for data entry that is
10
to 20% more EFFICIENT than required for accurate data entry. A robust

This is typical manager-babble. 10% to 20% more efficient than required
might cost 150% or 200% of what is required. Admittedly, most software
types don't really get the whole estimating thing, but those that do
recognize that these things typically ain't linear.

I have to agree with Gene. This is a red flag for a clueless consumer.
Best to pass on this one.

And what do you mean by "efficient" anyway? Lowest cost? Lowest escaped
defect rate? When you start asking for arbitrary bumps in "efficiency" you
are usually asking for higher cost AND higher defect rates. Is this REALLY
what you want to get something that is somehow "better" than what you need?

Quote: without failure. This is called "Robust Process Design" and key to quality
systems that work trouble-free.

Again, bull. Robust Design refers to understanding the enviroment and the
product's response. Arbitrarily designing in a 10 or 20% "safety factor"
without understanding the implications can, and often does, do more harm
than good. Even in the bolts and iron world these "safety factors" are
rarely one-dimensional things. There are cost, and they are invariably
disproportionate to the "improvement'.

At least in the physical world the tradeoffs are relatively simple to
calculate and thus can often be explained, even to a manager. But in the
software world, even though the data is out there, few people understand it
and even fewer can explain it. So customers ask for something seemingly
harmless and get bloated budgets and inflated bug rates.

....

Gene Wirchenko · Guest

"Wayne Lundberg" <Waynelund@worldnet.att.net> wrote:

Quote: "Gene Wirchenko" <gene@abhost.us> wrote in message
news:115s3cca9prdf49@news.supernews.com...

[snip]

Quote: I am really tired of this 110% nonsense. 100% is the maximum.
If you are asking for something obviously impossible, I will wonder
what else impossible you may be asking for and wonder what other
details you may have fudged. 110% is a good way to convince me that I
have better things to do than your program.

[snip]

Quote: You are right. What I meant was to create a system for data entry that is 10
to 20% more EFFICIENT than required for accurate data entry. A robust
system, like if you want a car that runs 100 MPH on a dependable, regular,
trouble-free basis, it should be designed to run at 120 miles per hour
without failure. This is called "Robust Process Design" and key to quality
systems that work trouble-free.

Now, THAT is something that I can get behind. I can be sold on
real benefits very easily.

Sincerely,

Gene Wirchenko

Computerese Irregular Verb Conjugation:
I have preferences.
You have biases.
He/She has prejudices.

Wayne Lundberg · Guest

<butcherdwayne@hotmail.com> wrote in message
news:115tlqghk46qg32@news.supernews.com...
Quote:
I'm looking for more info about Lean Accounting. I found a conference
that is devoted to the subject of Lean Accounting, but I'm not sure if
I should waste my time learning about it if it's not "going to stick."
Any thoughts? www.leanaccountingsummit.com/LA.

Huge difference. Traditional cost accounting is directed toward the taxing
laws in your state and country. Lean accounting is more a management tool.

For example, what is the loss to the company for scrapping a speaker at the
end of the assembly line that has $1.30 in material and $0.30 in labor?

Traditional accounting will list the loss at $1.50 because of tax laws. A
true accounting system designed to serve management decisions would show the
loss to be the sales price ($7.00) to the company.

If management looks at $1.50 as the loss, they may not take corrective
action due to the cost involved (ROI). But if they were to see the $7.00
sales price of the speaker as a loss, then they would boogie up to the bar
and force corrective action based on a sound ROI.

Another important difference is that cost accounting gets into too much
detail that is meaningless. They will cost out toilet paper as an entry.
Lean accounting is simple: How much money did you take in TODAY and what are
the costs of all labor and materials? What is left over for us to use as we
see fit? Thus, management decisions are easier and more effective.

Wayne
www.pueblaprotocol.com

___cliff rayman___ · Guest

Wayne Lundberg wrote:

Quote: Traditional accounting will list the loss at $1.50 because of tax laws. A
true accounting system designed to serve management decisions would show the
loss to be the sales price ($7.00) to the company.

How do you figure? The loss would be labor and materials plus the other
marginal costs of producing that product. Your $7.00 loss assumes that
you lost the sale on that item, which is not always the case. Even
then, the $7.00 is a lost opportunity, not a cost.

--
_____cliff_rayman_____________________________________
Business Consulting and Turnaround Management
[web] http://www.rayman.com/
[web] http://all-clear-turnaround-management.com/
[eml] cliff _AT_ rayman.com
[phn] 888-736-3802 x701
[fax] 818-743-7404
______________________________________________________

Wayne Lundberg · Guest

"___cliff rayman___" <cliff@SPAMMER_GO_HOME_rayman.com> wrote in message
news:1168k75gkku1j3d@news.supernews.com...
Quote:
Wayne Lundberg wrote:

Traditional accounting will list the loss at $1.50 because of tax laws. A
true accounting system designed to serve management decisions would show
the
loss to be the sales price ($7.00) to the company.

How do you figure? The loss would be labor and materials plus the other
marginal costs of producing that product. Your $7.00 loss assumes that
you lost the sale on that item, which is not always the case. Even
then, the $7.00 is a lost opportunity, not a cost.

--

You just made my point. See how difficult it is to shift paradigms?

Wayne

Quote: ______________________________________________________

___cliff rayman___ · Guest

Wayne Lundberg wrote:

Quote: "___cliff rayman___" <cliff@SPAMMER_GO_HOME_rayman.com> wrote in message
news:1168k75gkku1j3d@news.supernews.com...

Wayne Lundberg wrote:

Traditional accounting will list the loss at $1.50 because of tax laws. A
true accounting system designed to serve management decisions would show

the

loss to be the sales price ($7.00) to the company.

How do you figure? The loss would be labor and materials plus the other
marginal costs of producing that product. Your $7.00 loss assumes that
you lost the sale on that item, which is not always the case. Even
then, the $7.00 is a lost opportunity, not a cost.

--

You just made my point. See how difficult it is to shift paradigms?

Of course, but the paradigm you shift to better give correct
information. If you were using the $7.00-los-system at Intel, you would
show a loss instead of a profit because of the (expected) low yield on
high-end microprocessor chips. This might cause Intel management to
produce high-yield, but much lower priced processor chips which would
reduce profits on the bottom line and not increase them.

You need to always put a system in place that increases cash flow over
the long term. Any other costing measure is pure fantasy.

Quote:

______________________________________________________

--
_____cliff_rayman_____________________________________
Business Consulting and Turnaround Management
[web] http://www.rayman.com/
[web] http://all-clear-turnaround-management.com/
[eml] cliff@rayman.com
[phn] 888-736-3802 x701
[fax] 818-743-7404
______________________________________________________

Wayne Lundberg · Guest

"___cliff rayman___" <cliff@SPAMMER_GO_HOME_rayman.com> wrote in message
news:116b30ar8khm8c@news.supernews.com...
Quote:
Wayne Lundberg wrote:

"___cliff rayman___" <cliff@SPAMMER_GO_HOME_rayman.com> wrote in message
news:1168k75gkku1j3d@news.supernews.com...

Wayne Lundberg wrote:

Traditional accounting will list the loss at $1.50 because of tax laws.
A
true accounting system designed to serve management decisions would
show

the

loss to be the sales price ($7.00) to the company.

How do you figure? The loss would be labor and materials plus the other
marginal costs of producing that product. Your $7.00 loss assumes that
you lost the sale on that item, which is not always the case. Even
then, the $7.00 is a lost opportunity, not a cost.

--

You just made my point. See how difficult it is to shift paradigms?

Of course, but the paradigm you shift to better give correct
information. If you were using the $7.00-los-system at Intel, you would
show a loss instead of a profit because of the (expected) low yield on
high-end microprocessor chips. This might cause Intel management to
produce high-yield, but much lower priced processor chips which would
reduce profits on the bottom line and not increase them.

You need to always put a system in place that increases cash flow over
the long term. Any other costing measure is pure fantasy.

My argument is that using cost accounting for management decionmaking is
questionable. Let me try to put it into reality, from an actual
on-the-shop-floor example:

I was being interviewed by the ceo of a speaker manufacturer and the job in
question was to be his VP Operations. As we walked the assembly line of 80
people assembling speakers at the TAK rate of 12 seconds, I observed at the
end of the line an occasional speaker being taken from the line and put onto
a special pallet. I asked, and Jeff told me they were rejects and would be
tossed into the garbage because once sealed, they would cost more to repair
than to make new ones. I suggested that for every bad speaker, tossed into
the garbage, his loss was the loss of the sales price. He argued like you
do. That there is no way the sales price could be considered a loss. So I
asked how much overtime would be required to make up for the scrapped pieces
in order to fulfill his contract with Radio Shack. He said overtime in
Mexico is nothing and shrugged his shoulders. Remember... he had in his mind
a $1.50 loss figure and knew that disrupting the line to fix the problem
would probably be costly and not worth the time. He was willing to continue
absorbing the loss due to this quality problem.

He never admitted this and the problem would have continued forever. But I
was able to identify the problem and fix it even as we stood by the line. As
days went by, I saw him with a smile on his face and he showed me the latest
cost/revenue analysis on this particular speaker and said how happy he was
with my whipping the crew into shape to make more, better, for less. The
result of this happy smile was that I had eliminated the losses and allowed
those few speakers per hour go into invoicing which produced cash flow above
what had happened just a week before.

Call it what you want. I was lucky that I could take action to solve the
problem. In most cases you have to hit the ceo over the head with a two by
four to get their attention and one way to do it is to show them the actual
cost of lost business as a negative to their cash flow... no matter what the
cost accounting department says.

Wayne

___cliff rayman___ · Guest

Wayne Lundberg wrote:

Quote: "___cliff rayman___" <cliff@SPAMMER_GO_HOME_rayman.com> wrote in message
news:116b30ar8khm8c@news.supernews.com...

with my whipping the crew into shape to make more, better, for less. The
result of this happy smile was that I had eliminated the losses and allowed
those few speakers per hour go into invoicing which produced cash flow above
what had happened just a week before.

In this case, you allowed the company to produce more speakers, which were
demanded by the customers, and thereby increased revenues. In this case, each
lost speaker did lose the full value of the sale price and not the cost of the
speaker. The loss of the speaker only equals the sale price and not the cost,
when demands exceeds "manufacturing capability minus scrap". In this case,
decreasing scrap, increases profits, not by the loss of the labor and
materials, but by the price of the saleable unit.
--
_____cliff_rayman_____________________________________
Business Consulting and Turnaround Management
[web] http://www.rayman.com/
[web] http://all-clear-turnaround-management.com/
[eml] cliff__AT__rayman.com
[phn] 888-736-3802 x701
[fax] 818-743-7404
______________________________________________________

Guest · Guest

Good one
Kasee Palaniappan
Visit http://www.geocities.com/kasee_pl for Gifts(by Google)
Join http://groups-beta.google.com/group/Cyberczars

Allan Adler · Guest

"Deodiaus" <deodiaus@my-deja.com> writes:

Quote: I was thinking of using CAD/CAM & VRMLfor search engine applications.
Ideally, I would want businesses to specify their components and have
people either supply them, or build them. Hence, if I needed a part
for my manufacturing outfit, I could post it on the internet, and have
it sought out.

There are a lot of ways that a part can be wrong for what you want,
no matter how right it looks. But this still seems like a reasonable
idea. What I'm not sure of is why the existing search engines aren't
already adequate for it. Can you illustrate that with a specific example?

Quote: However, this is something that people usually post by
model number and manufacturer, rather than CAD drawing. However,
oftentimes the model number is irrelavant if the part is no longer
being manufactured, or is no longer listed on the original.

There is or was a company called Rockland or Rockwell or something like
that which advertised itself as "the trailing edge of technology". They
would find out how to make stuff that was on the way out or long gone.
That included making extinct computer chips.
--
Ignorantly,
Allan Adler <ara@zurich.csail.mit.edu>
* Disclaimer: I am a guest and *not* a member of the MIT CSAIL. My actions and
* comments do not reflect in any way on MIT. Also, I am nowhere near Boston.

Mike Turco · Guest

"AtlantaDon" <Don.Landy@nscommunications.com> wrote in message
news:11594t6gq6iq8ba@news.supernews.com...
Quote:
I would like to insert text into a note field and then merge the not
into a document.

Any suggestions?

Don Landy

Don, I did a search for "act database mail merge" (without the quotes) at
google.com. There are several links that look as though they'd be relevant.
(I don't use Act myself so I can't answer your question directly.) -- Mike

Victor Roberts · Guest

On Mon, 28 Mar 2005 06:44:31 -0000, "Kao-Ly Yang"
<kaoly@sbcglobal.net> wrote:

Quote:
Hello,

I am interested in opening a publication company. I wonder how I could
proceed legally.

You should speak with an attorney who understands business law in the
state in which you are located. You will need to decide how to
organize your company, as Sole Proprietorship, LLC< S Corporation or C
Corporation. Each has its advantages and disadvantages, The lawyer
will help you work through the various options.

Quote: I also want to know what I should do to have more
information regarding import-export because I would like to print my book in
Southeast Asia then transport them to the US.

The attorney may be able to recommend someone with expertise in
import/export issues or may understand these himself or herself.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

Victor Roberts · Guest

Victor Roberts wrote:

Quote: On Mon, 28 Mar 2005 06:44:31 -0000, "Kao-Ly Yang"
kaoly@sbcglobal.net> wrote:

Hello,

I am interested in opening a publication company. I wonder how I could
proceed legally.

You should speak with an attorney who understands business law in the
state in which you are located. You will need to decide how to
organize your company, as Sole Proprietorship, LLC< S Corporation or C
Corporation. Each has its advantages and disadvantages, The lawyer
will help you work through the various options.

Sorry for the typo. Should have typed: "Sole Proprietorship, LLC,
S Corporation or C Corporation."

Vic Roberts
Replace xxx with vdr to respond via e-mail