David Paino

Traditional manufacturing internal control processes that rely on tracking materials and resources through the plant and monthly variance reports to assess performance to plan are insufficient to control the lean company. What is needed are real-time, visual controls linked to corporate plans that trigger both the timely problem identification and resolution on the shop floor and the creation of continuous improvement kaizens that drive value stream performance. Existing control processes with their vague linkages to problems and long feedback loops are too crude to manage the rapid change and agility required to support lean. The job of the financial officer in the lean company is to ensure that the internal controls are suited to the lean company, and to be actively involved in the plant to ensure that they are in place and that they are operating as planned. But changing internal controls in the era of increased corporate oversight via Sarbanes Oxley, auditor review and Board attention requires a structured plan and careful implementation.

This session develops a set of lean performance metrics and visual controls that constitute the new internal control system for the lean company. It concludes with a presentation of a set of diagnostics for the controller and his/her staff to ensure that the lean controls are in place and operating as planned and a high-level work plan for implementing the new control system.