Those in the manufacturing industry are familiar with the significance of implementing tactics to increase efficiency and effectiveness throughout the organization. But did you know that these same concepts can benefit businesses outside of the manufacturing realm?
Consider the five key principles identified in Jim Womack’s book, The Machine that Changed the World and think about how they relate to your company.
- The customer defines value.
- The company must focus on eliminating waste. (Waste is defined as any activity that doesn’t add value to the company.)
- The customer establishes pull.
- The company must involve and empower people who add value.
- Total cost is the ultimate performance metric.
Now, reflecting on these principles, how can you optimize performance of your people while optimizing the customer experience?
Focus On The Big Picture
You want to be successful. To do that, you must have a clear understanding of what “success” looks like to you. A good way to do this is to identify challenges (present and future) that may hinder you from realizing your maximum potential. Once you know what you are looking for, you can generate proactive solutions – ultimately increasing your efficiency.
You may consider Lean Six Sigma to be a tactic solely for manufacturing companies. But Lean can actually be very valuable to all types of companies. But first, you have to understand the Lean concept. First, Lean is not “headcount reduction” and thinking of it as such could result in greater long-term problems. When you decide to embrace a Lean approach to business, you should actually be committed to:
- Understanding your customers better and making sure the processes your business adopts meets (and exceeds) their expectations.
- Harnessing your employees’ knowledge to better serve your customers.
- Continuous improvement while building greater business capacity.
Things Are not Always What They Seem
When you embark on your Lean journey, financial struggles early on are normal. It can be scary at first, but if you are persistent, you will ultimately realize positive results. Think about it this way, traditional absorption accounting allocates overhead to inventory. As inventories are reduced in the interest of becoming lean, prior period costs are expensed in the current period. When your finance experts and executive leadership team aren’t aware of this transitional lag, they may mistakenly associate Lean with declining profits. Instead, keep going – pretty soon you should be able to notice improvements to your company’s cash flow.
Take The Plunge
Your Lean initiative will only be successful if management commits to its success. Therefore, they must fully commit to the concept while taking the time to become familiar with the benefits of Lean. Sure, dipping your toe in and testing the waters may seem like a safe bet, but unless you take the full plunge, you will never realize your company’s full potential and world-class results.
Lean continues to evolve from a manufacturing concept to one likened to secret weapon used to boost the effectiveness of office and administrative processes (and so much more). In this era when continued improvement is idealized, Lean has emerged as the answer. Could your company benefit by becoming Lean? Listen to this 17-minute podcast to find out.