Implementing Lean Enterprise Principles
Do you want to know more about implementing lean enterprise principles into your business?
Implementing lean enterprise methods will ultimately lead to change for the good of your business. However, here are some things you will need to consider before you put a lean implementation plan into action:
- Will implementing lean methods cause your business to lose money?
- Will the quality of your products or services be affected?
- Will your customers become unhappy with your company?
Your company may temporarily lose money during the starting phase of the lean implementation. Why is this? The truth of the matter is that even though your goal is to try to reduce overall costs, you will appear to be increasing spending and reducing operating profits. The reason for this is twofold – operating systems and inventory. At first, an organization will have to run two operating systems side by side for a short period of time. One will be the traditional business system and the other will be a lean enterprise business system. The dual operating systems will lead to additional tasks and can stretch the existing workforce.
Secondly, as lean enterprise principles are implemented, the inventory levels will start to be reduced and this will directly impact the bottom line. The financial accounting department treats inventory is an asset that is included in the profit and loss statement. Reduce inventory and you reduce the asset value of the business which in turn will reduce its operating profits. A business leadership team must be very careful during this period so they clearly understand the reason behind this phenomenon. Many companies panic at this point and stop their lean manufacturing implementation program.
When implementing lean business methods it’s important to maintain the quality of your products or services. What that means is that you need to be sure that you’re not cutting out important processes to save money in the short term which in the long term will only end up costing you – due to poor quality products or services leading to unhappy customers. It’s also very important not to look for vendors who can supply the cheapest materials at the expense of inconsistent quality or failure to meet your scheduled delivery. On top of this, you want to make sure that you’re not downsizing staffing levels and losing intellectual property to the point that you cannot run your business effectively. One solution to this would be initiating a cross-training program so your staff members are capable of doing more than one job in your facility.
Of course, these are just a few things to look at when thinking of making changes to your company and implementing lean business methods. Remember, these changes will affect your business, your employees, the quality of your products or services, and your customers. If you stay focused on these things, and not just the impact to the bottom line, your company will be in a better position to successfully implement lean business methods.
We hope this short article covers some of the basic issues a business may face when considering implementing lean manufacturing methods.
Our senior Lean Manufacturing Coach, Chris Turner, has 25 years of experience in the Continuous Process Improvement field, and has created “Lean Certification Online” to serve the lean improvement needs of manufacturing and non-manufacturing organizations.
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