Several years ago, there was a lot of interest in going “lean.” Much of the interest was being generated in manufacturing companies who were finding that implementing lean philosophies and practices was helping them to increase productivity, reduce cycle times, reduce inventory carrying costs, and control other costs through greater productivity.

While there was talk about lean principles moving into the service industry, I have not seen many reports on the experiences of service companies who have made the transformation. So what is the status of lean moving beyond manufacturing?

Implementing the lean philosophy in manufacturing requires changes to the way accountants gather, analyze, and report on operations. The same applies for service industries. Accountants become focused on providing more timely and understandable information for decision-making that leads to better value for customers along with improved profitability, cash flow, and continuous improvement throughout the company. Lean encourages constant effort to reduce waste and improve productivity. All this still has to be accomplished while maintaining adequate internal control.

If you are in service industries such as telecomm, financial services, healthcare, or even government and education, have you considered or are you using lean principles to help improve your organization’s business processes?

Have you considered or are you looking at the “value streams” of your business?

Have you been able to develop leaner ways of determining the costs of your services for decision-making, performance measurement, and measures of efficiency?

Lean principles and accounting are not a panacea … there are pros and cons that can be debated ad nauseam. But they are worth considering in these times when we all could use a fresh look at our businesses to see where we can improve ourselves for the future.

So what is happening with lean in your organization? ###