If your business hasn’t been exposed to LEAN Principles and best practices, then you’re paying for waste you don’t need. It's likely the most expensive kind too – time, space and inventory – but if you think that can’t be redeployed, think again.
The practice of transforming a business into a LEAN enterprise is not a new one. Henry Ford started it, Toyota perfected and globalized it and now it is a must-have competitive practice for many companies.
You’ve heard it by other names, I’m sure. Just In Time (JIT), the Toyota Production System (TPS), the Theory of Constraints (TOC) etc. None of these names really do it justice and it’s incorrect to view this approach as one isolated to the manufacturing industry. If your business involves any type of process that is repeated, you can benefit.
I was introduced to LEAN while running a manufacturing plant struggling to compete with lower-cost imports and a rising Canadian dollar. I hired a consultant to come into my business with a fresh set of eyes and a LEAN focus and help me see the waste within my business. The results were astonishing; shop floor space reduced by 50 per cent, labour costs per unit reduced by 67 per cent, inventory reduced by 71 per cent. The capital cost was $1,300 for the electrical that allowed some machinery to be moved and the initial implementation took less than six months.
You might be thinking, my personal experience doesn’t necessarily prove that LEAN works, it just shows I was a lousy manufacturer. And while I may not have been an expert, I have seen these types of returns on investment in every LEAN implementation I have been exposed to, which is why I’m such a passionate advocate.
For more insight, I contacted Bob Kerr, vice president of operations for High Performance Solutions, a highly regarded and experienced LEAN Consultant in Kitchener, Ontario. I challenged Bob to describe how a small business owner in retail, service or distribution could benefit from LEANing their organization.
“You need to overcome the temptation of doing things because that is how you have always done it. This needs to be done from the customer’s perspective,” explains Kerr. “Take a walk through your business and try to look at your processes through the eyes a of a customer and ask yourself this question; ‘Would I be willing to pay for what I see going on in this process?’”
But it’s not just about manufacturing, he points out. Even a one-man plumbing service can benefit from these principles.
“Have you ever stood in line at a bank or an airport thinking about the value of the time of all the individuals ahead of you and behind you? The opportunity lies in measuring your demand and – more appropriately – assigning resources to only the processes that benefit the customer and the customer is willing to pay for. Then you need to make those resources as flexible as possible. It’s never as easy as it sounds but it is possible to improve – no matter how new or mature your business.”
Kerr knows that successful implementation requires everyone's cooperation, especially the employees'.
“There needs to be an open environment for employees to identify their least favourite or awkward tasks – they might not know it, but they are likely identifying waste. They likely also already know how to improve it. Ask them, ‘If this was your business, what would you do differently’?”
I know from experience that doing this alone is tough – a fresh set of eyes, at least at the beginning – is just the objectivity you need to help to start identifying the opportunities on your own.
To get the ball rolling, why not find a business that is already doing LEAN and visit them and ask for their perspective? Research the different aspects and approaches visit the LEAN Enterprise Institute website and other resources for more information.
LEAN is about continuous improvement, so as you advance, things get more detailed and from the outside, may seem more complex. Start simple. The early savings come fast and in my experience, require very little upfront expense. The alternative to LEAN is to do nothing and these aren’t the times or business climate that supports the status quo.