Brian Maskell

      Standard costing - and other full absorption product costing methods - is actively harmful to the lean manufacturer. Traditional standard costing methods calculate the product costs wrongly, they lead to bad decision making that in turn lead to reduced revenues & lower profitability, and the processes required to maintain a standard costing system are complex, time-consuming, and very wasteful. In addition, standard measurements like earned hours, efficiency, machine utilization, and absorption variances actively undermine what we are trying to achieve through lean transformation.
      This workshop will show how value stream costing is used instead of standard product costing to provide excellent control of costs, valid and meaningful information for decision-making, and the financial numbers required for external GAAP reporting.
      We will discuss how to create a simple, summary direct costing of the value stream, weekly value stream income statements, and how this information can be rolled-up to provide month-end report for internal use and external reporting. Using a case study we will demonstrate how pricing, quoting, margin analysis, make/buy, sourcing, and other routine decisions can be made quickly and easily using value stream costing.

Agenda:

1. What is the standard costing problem?
2. Value stream costing and value stream income statements
3. Decision-making using value stream costing
4. Making it happen