Box Scores
Description:
If managing a business was as easy as pushing a button and generating $1 anyone could do it. But life within businesses is much more complex. Within business accounting, financial metrics are based upon standards and variances to those standards and usually they don’t provide clear direction on how to be more productive. These metrics are almost always lagging indicators and don’t assist in daily decision making. In addition, the P&L statements are typically non-descriptive of the real cost drivers of conversion margin and conversion cost; with the use of Box Scores, Value Stream accounting can help close this gap.
Box Scores allow a value stream to publish a ‘weekly P&L’ that is built off of actual costs, actual production units
Completely new questions on ‘how can we be more profitable’ are asked … every week
Let TGG work with your team to implement Lean accounting and box scores and your organization will a) understand the real cost drivers, and because of this b) start making different operational decisions.
An example of weekly box score components to provide an example of how labor, machines, materials, facilities and other costs are incorporated into the score.
1.0 Operational metrics:
– Sales per person
– Stock outs
– Scrap
– Dock to dock days
– Average cost
2.0 Capacity
– Productive capacity
– Non productive capacity
– Available capacity
3.0 Financials
– Revenue
– Material costs
– Employee costs
– Machine costs
– Utilities
– Other costs
– Facility
– Total costs
– Value stream profit
– Return on sales
– Inventory value
– Cash flow
Easier, faster, safer, better, cheaper and more profitable. That’s the organization that understands Lean accounting.
Duration:
3 days SCO
10 days RUN
3 days Evaluate
Typical Outcomes:
- Identified value streams
- Build, train, and implement box scores
- Calculate with little to no allocations or variances
- Control and reduce costs
