I started practicing Lean Management in the 1980’s when I was responsible for the smooth operation of 16 adhesives manufacturing plants, and believe me I have heard nearly all of the reasons why Lean will not work in a given business. Excuses such as “We are low volume, high mix,” “We are high volume, low mix,” “We are a custom shop,” “We are not manufacturing,” “We don’t make automobiles” and the ultimate excuse, “We are unique.”
It is true that each business is different or “unique” and the Lean approach needs to be customized for each individual company. In all of my years of experience, I have never run into a situation where Lean did not have the opportunity to considerably improve a company’s safety, quality, delivery, lead-time, cost, customer satisfaction, employee morale and stockholder value.
The origins of Lean rest with the Toyota Production System implemented decades ago. Toyota was inspired by some of our industrial and quality leaders like Henry Ford, Fredrick Taylor, W. Edwards Deming and Joseph Juran to name a few. The key thought is that because each company is different, you cannot blindly adopt what works for Toyota or any other company for that matter, you must adapt Lean principles to fit your business.
Lean is a mindset, a way of thinking with a commitment to achieve a totally waste -free organization that is driven by the customer. It is about leading with respect and full employee involvement. Lean is achieved by simplifying and continuously improving all your processes (administrative and manufacturing). I challenge any business, no matter how “unique”, where this concept doesn’t apply.
Some of the benefits achieved through the proper implementation of Lean are as follows:
• A minimum of 50 percent improvement in quality defects per year
• 99 percent On-Time Delivery to Customer Request Date
• Reduction in customer lead-time of 50 percent per year
• 15-20 percent improvement in productivity per year
• Double digit inventory turns within the first two years
• Significant improvement in market share as a result of better service and quality
The organization’s shareholders benefit as well, such as a sweeping improvement in employee morale as they become more involved in designing and improving the work processes they operate on a day-to-day basis. Customer satisfaction significantly increases as your quality and lead-times improve. Finally, your stockholders experience the benefit through higher quality earnings and a solid balance sheet.
In the final analysis, any business (service or manufacturing) has the potential to flourish from Lean. I have never witnessed a situation where Lean, when properly implemented, did not have a significant impact. In order to realize the full benefits of Lean, leadership needs to be fully committed and resist the tendency to revert to the old way of doing things.