Box score reporting

Box score is used with lean accounting. Lean accounting is an accounting method with a purpose to support the lean enterprises as a business strategy. Lean accounting is used for changes that a required in a company’s accounting, control measurement, measurement and management process to support lean manufacturing and lean thinking. The lean accounting method was first developed and introduced by Toyota and other Japanese companies. Lean Accounting considers lean focused performance measurements, decision-making and reporting using a box score.  

The standard format of the box score represents a 3-dimensional view of value stream performance, operational performance measurements, financial performance, and how the value stream capacity is being used. The capacity information shows capacity within the value stream is used productively, how much is used to do non-productive activities, and how much value stream capacity is available for use. It shows the value stream performance on a single sheet using a simple and accessible format.

Box score provides information for routine decision-making, including quotes, profitability, make/buy, sourcing, product rationalization, and so forth. Let us consider an example of box score reporting for sourcing a new product. Companies using the lean accounting method create standard templates for the various kinds of daily routine decisions. These include assessing the profitability of a sales order or request for quote, make-buy decisions for products or components, the impact of improvement projects, and so forth.

The box score reporting demonstrates a short term decision and assume that the company's capacity and costs are largely fixed. They are also used for medium term decisions without assuming fixed capacity and costs. The Box Score reporting is also used for strategic decisions such as the introduction of new products and Target Costing processes. The method is flexible and meets the needs of different kinds of decisions, yet using the same underlying approach that we do not try to calculate a fully absorbed product cost.

Questions

• What is a box score reporting?
• How is It useful for companies using lean accounting?