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INNOVATION AT WORK
BY THE BOOK
REVIEW BY BILL BAKER
The Lean CFO: Architect of the Lean Management System
The Lean CFO: Architect of the Lean
Management System by Nicholas S.
Katko (CRC Press, Taylor & Fran-
cis Group, Productivity Press, Boca
Raton, Florida, 2014, 138 pp. ISBN
The author was the CFO in a manufac-
turing company and caught the “lean”
bug as his company strove to imple-
ment lean. Upon his investigation and
research to understand the new ques-
tions he was being asked to support
from finance by the “lean people,” he
came to see the great value in lean and
how it could “make us a lot of money.”
In this book, Nick Katko sees the CFO
as the catalyst to become involved
and to become the architect of a new
lean performance measurement sys-
tem that could be used to measure the
entire business system. He debunks
the use of standard costing as the
“before/traditional model” that finance
and accountants are using, but is the
exact opposite of lean measurements
that should be the basis of a lean
management system (LMS).
In Chapter 2, he discusses the fallacy of
lean as being part of a business strategy
versus being “the business strategy.”
He states that if lean is part of the
business strategy, then management will
selectively implement certain business
practices but not be fully committed.
Chapters 3 and 4 delve into “flow” as
the real goal of lean and productivity,
both in the factory and in the office.
Chapters 5-8 cover traditional mea-
surements versus lean measurements,
value stream accounting and capacity.
Chapter 9 is devoted to debunking
standard costing and how to eliminate
it. This is perhaps
the most challenging
effort if the CFO is
not a major part of a
Chapter 10 address-
es another beast that
can be a barrier to
lean and that is the
ERP software sys-
tem that can embed
all the wrong mea-
sures, hence the
It covers the CFO’s role with a unique
approach by addressing work orders,
inventory and work in process. Chapter
11 wraps up the author’s concepts
and serves to motivate “lean leaders”
that implementing a lean management
system can be done successfully.
He states that if lean is part of the
business strategy, then management
will selectively implement certain
business practices, but not be fully
committed. The best element he dis-
cusses is all the normal management
decisions and how they fit in lean
accounting in Chapter 8.
Any questions unanswered?
The book provides insights into ERP
software systems, but digging deeper
in other resources is recommended.
Worth the read?
The book is short and to the point and
is from a CFO practitioner’s viewpoint.
It makes the case that the CFO, if not
the lean champion, definitely needs to
be a key leader in a lean transformation
journey. Only the CFO can change the
finance/accounting perspective. It is a
great tool for all lean leaders to bench-
mark themselves and their companies.
You can adopt a school
The AME Adopt-a-School Program con-
nects manufacturers with schools in their
local communities to give students an op-
portunity to experience practical, hands-
on learning and to help manufacturers give
back to their communities while helping
the next generation of manufacturers.
• In 2011, the average manufacturing
worker in the United States earned
more than $77,000 annually.
• The United States is undergoing a man-
ufacturing renaissance. Companies are
hiring; manufacturing jobs are stable,
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• As U.S. schools introduce more STEM
classes, there is a greater need for
• By bringing manufacturers to schools,
students can get practical, hands-on
learning, access to mentors and have
an opportunity to explore options for a
The AME Adopt-a -School Program cre-
ates the opportunity to inspire, support
and prepare individuals for this world-
For more information, contact Glenn
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Mark your calendar
APRIL 27-30, 2015
JUNE 1-4, 2015
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