The current economic crisis dictates that business managers eliminate waste in every area of business operations. It requires in-depth, purposeful planning to reduce inventory, increase cycle times, reduce returns and call backs, and eliminate any wasteful steps in your business processes.
The philosophy of lean thinking has been around for some time. Toyota , at the time just a small car manufacturer, used the philosophy with its "just-in-time," inventory process. Other successful lean applications can be observed in companies such as Federal Express, Lens Crafters, Dominoes Pizza, Southwest Airlines, and Dell Computers. These are just a few that have successfully pioneered the principles of lean thinking into their business giving them an advantage over their competitors.
Lean thinking is a mindset. You have to be open to the idea that your business has steps, procedures and practices that are wasteful and unproductive. It is easy to become so busy with day-to-day work that you fail to focus on the critical process of delivering your product or service in the most efficient manner possible. Part of this is reluctance to change. Your employees know how to achieve a result a certain way and they are hesitant to alter their routine.
Lean thinking has five basic steps:
Identify the activities that create value
Determine the sequence of activities – creating a value stream by identifying the opportunities for improvement in your customers' eyes
Eliminate activities that do not add value
Allow the customer to "pull" the demand of what they really want – this avoids selling customers unwanted products or services and maintains value of the product
Continually improve the process
An example is a business that adopts lean thinking and reduces the order-to-delivery cycle. The business creates the correct sequence to deliver its product or service faster to the customer, concentrating on the three steps of a) taking the order, b) building the order and c) delivering the order. In each of these three sub-parts, the company eliminates wasteful steps, sequences the process and creates a system to be followed on every order. The results are not just faster deliveries, but also reduction of inventory, backlog, delays in production and increased cash cycle. The business can actually sell more without increasing costs of people because of the reduced cycle time.
The relentless elimination of waste in every area of operations with the aim of reducing costs and increasing efficiency takes purposeful thinking, implementation and dedication to the principle of continuous improvement.
A company that takes the path of lean thinking will get results:
Improved capacity
Improved product quality
On-time production and delivery
Increased productivity
Flexibility to change processes
Customer loyalty
Customer and employee satisfaction
Reduced costs, improving profit opportunity
If this is not enough, there are also improvements in shortened lead times, reduced operating costs, fewer warranty calls or call backs. Companies that adopt lean principles will be successful and have more opportunity to increase market share.
Why haven't more business enterprises embraced lean thinking? The truth is many companies have embraced it because they need the competitive advantage. However, many are still too busy with work to challenge their individual business processes. There is a desire to improve but not the focus.
Once you look at your business and accept that there are excesses that can be eliminated, the best place to start is to obtain a lean education through training, or even coaching. There is a wealth of information on the internet including books and workshops on the lean philosophy. Since this process includes continuous improvement you can get started by taking steps that lead to improvement, supplemented with education and the desire to be more successful.
Here is the secret of lean that makes it easy to adopt. Lean thinking is not like jumping out of an airplane, even with a parachute. Lean thinking is based on the principles of continuous improvement. It is more like climbing a ladder looking up, not down. Make small, measured improvements, implement them and then make the next improvement with the idea that a change that does not make a difference is improved upon and you learn from the effort. Most importantly, do not succumb to the belief that every change works without flaw. It takes making changes, improving on them and then helping everyone to successfully implement them – time after time before your business receives the benefit. The value is the benefit will be continuous, not a one-time lucky event.
Production and process improvement is a competitive weapon of success. It is like the Holy Grail of business. Eliminating waste, adding value and gaining a competitive advantage will significantly add to your company's success and profitability. This is the ideal time to start.
