Katko, N: Lean CFO: Architect of the Lean Management System

The Architect Introduction Designing the Lean Management System Constructing the Lean Management System Moving into Lean Business Decision Making Tearing Down the Old House The Economics of Lean Introduction Lean Is the Strategy Lean Every Day The Economics of Lean The Lean CFO-Key to Success with Lean Five Lean Principles Wrap-Up $how Me the Value Stream Flow Introduction What Is Flow? Flow Equals Real Productivity Eliminate Waste and Improve Flow Demand and Cycle Times Impact Flow Lean Performance Measurements Wrap-Up $how Me the Office Flow Introduction Office Flow: The Current State Office Waste Is More Complex Cycle Times Demand Departmental Work Flow Characteristics Wastes of Overburdening and Waiting Waste of Interruptions The Future State: Lean Office Flow Step 1: Design the Processes Step 2: Plan the Work Prioritizing Demand Single Piece Flow Step 3: Controlling the Work Level Scheduling to 80% of Capacity Control Interruptions Andon Visual Workplace Wrap-Up: Office Flow and the Lean CFO Measure Lean Performance, Not Profits Introduction Traditional Measurements Lean Measurements Changing the Measures Link Measures to Lean Strategy Using Lean Performance Measurements Wrap-Up It's about Spending, Not Costs Introduction Traditional Cost Management Value Stream Accounting Value Stream Costing Material Spending Labor Spending Machine Spending Quality Spending Maintenance Spending Material Management Spending Receiving Inspection Spending Value Stream Income Statement Wrap-Up The Value of Measuring Capacity Capacity in Traditional Manufacturing Capacity in Lean Manufacturing Integrity of Value Stream Map Data Operational Value of Capacity Financial Value of Capacity Wrap-Up Decisions, Decisions, Decisions The Current State: Standard Costing and Decision Making The Future State: The Value Stream Box Score and Decision Making Using Product Cost to Set Price Profitability of New Business Determining the Profitability of Customers, Markets, and Business Segments

After a tour of duty in public accounting, Nick Katko began his Lean management system career as chief financial officer of Bullard, a privately held manufacturing company in Kentucky. In the mid-1990s Bullard made a commitment to a Lean business strategy and began hiring operations people with Lean experience. Nick worked with Lean leaders to establish a comprehensive Lean performance measurement system that was used to measure and manage the entire business. As inventory was dramatically reduced, Nick realized the irrelevance of the standard costing system to the business. Nick created and introduced value stream income statements to Bullard, and all business decision making was based upon a value stream financial analysis of decisions. Eventually, labor and overhead rates were set to zero and inventory valuation was made with a simple monthly journal entry capitalizing manufacturing costs. In 2000, Nick left Bullard and started Strategic Financial Solutions, Inc., with his wife Deanna. Strategic Financial Solutions provides contract CFO and controller services as well as bookkeeping and tax services to companies in the Lexington, Kentucky area. While on Bullard's Lean journey, Nick read Making the Numbers Count by Brian Maskell. He liked the book so much he wrote Brian and told him about his own work with a Lean Management System. Nick and Brian talked regularly and, in 2002, Brian asked Nick to join BMA, Inc., as a senior consultant. As a senior consultant with BMA, Nick uses his experience to assist clients in Lean management implementation by working closely with them to resolve the real-world issues they face in implementation. These issues include removing traditional cost-based performance measurement systems in favor of Lean performance measurement systems, migrating from a traditional income statement to a value stream costing income statement, creating a transaction elimination maturity path, and working with management to create new business