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2. What should be the relationship between nonfinancial and financial
controls?
3. What are some common mistakes made by managers with regard to
nonfinancial controls?

4. What are some solutions to the common mistakes you identified?

6.5 Lean Control
LEARNING OBJECTIVES
1. Know what is meant by lean controls, and why the subject can be
confusing.
2. Understand the application of lean.
3. Know the five core principals of lean.
Lean control, or simply lean, has become an immensely popular business
control and improvement methodology in recent years. Lean control is a highly
refined example of nonfinancial controls in action. Lean is a system of nonfinancial
controls used to improve product and service quality and decrease waste. Research
suggests that up to 70% of manufacturing firms are using some form of lean in their
[1]
business operations. Lean was initially focused on improving manufacturing
operations but is now used to improve product development, order processing, and a
variety of other nonmanufacturing processes (sometimes called “lean in the office”).
What Is Meant by Lean Control?
Lean’s popularity has both resulted from, and been driven by, an explosion in
the volume of lean-related educational resources. Amazon offers almost 1,800 books
and other materials about lean, and Yahoo! hosts over 90 online discussion groups
relating to lean. Colleges and universities, industry trade associations, and private
consulting firms routinely offer courses, seminars, and conferences to explain what
lean is and how to use it.
Lean control is a number of things. According to James Womack, “it is a
process for measuring and reducing inventory and streamlining production. It is a
means for changing the way a company measures plant performance. It is a
knowledge-based system. It takes years of hard work, preparation and support from
upper management. Lean is so named because it purports to use much less of certain
resources (space, inventory, workers, etc.) than is used by normal mass-production
systems to produce comparable output.” The term came into widespread use with the
1990 publication of the book The Machine That Changed the World, by James P.
[2]
Womack, Daniel T. Jones, and Daniel Roos.
This abundance of education resources on the topic of lean is actually a mixed
blessing for managers who are just now becoming interested in lean. On the one
hand, today’s managers don’t have to search far to find lean materials or programs.
But the wealth of lean resources can also be a source of confusion for two main
reasons. First, there is no universal definition of lean and little agreement about what
the truly core principles of lean are. For instance, quality programs such as Six-
Sigma, or even lean Six Sigma, are other titles competing for the “lean” intellectual
space. Therefore, lean experts often approach the subject from differing perspectives
and describe lean in different ways. To make matters worse, lean is a topic that

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