<$MTBlogName$

« Dionna understands logistics, transportation, and markets. Why can’t the bureaucrats? | Main | Immigration policy, border practices, and lessons from the warehouse floor »

Finding Common Ground: bringing operations and accounting together

By Steve Geary | 02/06/2017 | 12:45 PM

Special thanks to Matt Hunt of Sehlke Consulting for assistance with this column.

Where is the common ground shared by operations and accounting professionals?  In fact, it often seems as if operations professionals and financial managers are pursuing conflicting goals.  Peel back the layers and get to the core, and you quickly discover that the two communities overlap with a vibrant and vital set of shared interest.  They just don’t speak the same language.

A military unit, in a galaxy far, far away, was working on a vehicle that wouldn’t start. The maintenance mechanics launched the same processes that they were taught, because “that’s how they’ve always done it”. 

Ah, the danger of standardization . . . sometimes, it helps to think.

Most back yard mechanics would immediately go for the battery. Alas, the vehicle would attempt to start, which meant it was getting power. Maybe it’s not getting enough power. Okay, order and replace the battery, but no luck. One day and a few hundred dollars down the drain.

We’ve all seen this movie.  In fact, we might have starred in it, going down the same path ourselves in the backyard with the family sedan.

If it isn’t the battery, it has to be the starter, right?  Fine, order and replace that. This field unit is not authorized or trained to repair starters, so the starter is pulled and sent to a maintenance center for an overhaul. Send it back, and trade it in for a rebuilt unit.  More time and more money invested into getting the vehicle up and running, and again no luck. Still the vehicle is “dead lined.”

Fast forward three months, the amount invested into finally bringing this vehicle back to life and over $13,000.  It turns out that the only part that needed to be replaced was a $1.38 fuse.  New fuse, and it fired right up.

Now, I’m a logistics knuckle dragger myself, so I completely understand the path this crew followed.  In fact, I could see myself doing the exact same thing, and once the vehicle was up and running I would be proud, and I’d let the budget guys worry about finding the $13,000 to pay for it.

Fortunately, there are useful accountants and auditors in the world, and they really can be a friend.  The starter scenario was uncovered by a team of auditors, and their discovery triggered a review and revision of training and maintenance protocols.  The accountants and operators worked together, added some brain cells, and came up with a better way.

Accountants and operators need to be on the same team.  Find the common ground, the shared issues, and the world becomes a different place.  One set of management controls – properly defined, integrated, and executed – advances the business along two fronts, financial oversight and operations.

Management controls in the broadest sense include organization plans, methods and procedures adopted by management to meet its missions, goals and objectives.  These management controls also serve as the first line of defense against fraud and violations of laws, regulatory violations, and compliance with provisions of contracts and business agreements.

While logistics and financial management share many of the same objectives, the two approach them from different perspectives using different language. Both aspects of business require clean and accurate data. Both utilize internal controls to ensure that business processes are working effectively and discourage fraud, waste, and abuse. Both business practitioners want the same thing; provide the best support possible to the government.

The National Defense Authorization Act of 2010’s mandate requires the Department of Defense (DoD) to have audit ready financial statements by 2017.  It’s time to break down the wall between auditors and operators.  Together, they can get the books cleaned up.

StumbleUpon Toolbar StumbleUpon

Comments

By submitting your comments, you agree to our Terms of Service.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About Steve Geary

Steve Geary

Steve Geary is an adjunct faculty member at the University of Tennessee's College of Business Administration, and is on the faculty at The Gordon Institute at Tufts University, where he teaches supply chain management. He is the President of the Supply Chain Visions family of companies, and Chief Operating Officer at ROSE Solutions, consultancies that work across the government sector. Steve is a contributing editor at DC Velocity, and editor-at-large for CSCMP's Supply Chain Quarterly. He is listed in Who's Who in America, Who's Who in the World, Who's Who in Science and Engineering, and Who's Who in Executives and Professionals. In November of 2007, Steve was recognized for "Selfless Service to Our Nation and the People of Iraq" by the Deputy Secretary of Defense.



Categories

Popular Tags

Recent Comments

Subscribe to DC Velocity

Subscribe to DC Velocity Start your FREE subscription to DC Velocity!

Subscribe to DC Velocity
Renew
Go digital
International