About this Presentation
This presentation equips the audience to differentiate between lean accounting and throughput accounting, in order that they cope with the recent wave of interest in lean accounting. It fosters debate on cost-world vs. throughput-world thinking. Key learning points include: 1. Review of lean accounting literature, including recently published articles, books, internet discussions; 2. Show similarities and differences between the lean accounting and throughput accounting to measurement in operations; 3. Describe the different approaches to lean accounting, and the philosophical background. Benefits to attendees include: an overview of what the lean community is talking about with regards to measurement and accounting; understand differences between lean accounting and throughput accounting, enabling them to see when lean accounting is really cost accounting without absorption; attendees are able to cope with the recent deluge of writings on lean accounting, and work with practitioners to redirect thinking towards the throughput world.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
This session draws a sharp line between two fundamentally different worlds: Lean Accounting still operates from a cost-world mindset focused on minimizing the cost of capacity, while Throughput Accounting starts from maximizing the use of capacity to improve system performance.
A major insight is that Lean Accounting is not one settled method but a collection of practices, often centered on simplified accounting processes, value stream profitability, and cash-flow-based decision support tied to Lean Manufacturing.
The presentation acknowledges that Lean Accounting can be a helpful bridge away from standard costing, especially through simplified reporting and relevant cash-flow analysis, but argues that it still misses the decisive TOC advantage: explicit recognition and management of the system constraint.
The strongest caution is practical: value-stream and process improvement can easily drive the wrong priorities if they are not anchored to the constraint. Throughput Accounting, buffer management, and the five focusing steps provide a clearer way to protect throughput and target the issues that matter most.
Instructor(s)
