Is your market becoming increasingly competitive? Are you struggling to turn a profit and remain viable in your niche? Are you wondering how you can continue to turn a profit and hopefully grow when you are facing these serious issues?
These are some of the more pressing questions that many of today’s smaller and larger businesses face. To some, they may seem insurmountable.
However, when you approach this problem in a practical and thoughtful way, you may achieve the incredible results that you desire.
Understanding Lean Thinking
You may have heard about Lean Thinking or Lean Six Sigma through your business classes in college, by reading professional articles online or through various other areas.
This is a powerful business improvement philosophy that was originally used in Motorola in the 1980s, and it gained increasing popularity when General Electric adopted its strategies for improvement in the 1990s.
Because of its history, you may assume that Lean Thinking is only useful in large organizations. However, it is now used in smaller and larger companies around the world and across all industries with amazing results, and it has a place in your business as well.
What Is Lean Transformation All About?
After World War II, Toyota was forced to remain viable in a time when resources were severely limited. After all, Japan was devastated by the war. Need is the seed for innovation, and Toyota produced its own unique production system that is now recognized as being the precursor to Lean Thinking.
The Toyota Production System was created with the overall goals to eliminate waste and redundancy while at the same time finding ways to maximize production. This was all intended to be completed without sacrificing quality or increasing cost.
You may be aware that the Toyota Motor Company is among the most profitable international companies operating today, and this is largely due to its now-famous Toyota Production System.
If Toyota can overcome its many significant challenges and rose to become a true leader in its industry, do you think a Lean Transformation may be helpful to your business as well?
The reality is that businesses of all sizes and across all industries may currently operate with a considerable amount of waste.
- Processes may be pointless or redundant
- Space may not be used efficiently
- Resources may be squandered
In addition to negatively impacting your bottom line, these challenges may be affecting your brand image, customer satisfaction and more.
Are you ready to improve your business through Lean Thinking?
Apply these steps to experience a profound transformation.
#1 Challenge the Status Quo
In many businesses, employees have wonderful ideas for improvement, but they feel unheard and unimportant. Your employees are the lifeblood of your company, and each of them has probably spent ample time thinking about how their activities and responsibilities could be improved.
In fact, employee encouragement is the main pillar of Lean Thinking.
Therefore, one of the first steps to take for a Lean transformation is to encourage your team to speak up. Talk to them regularly about the need for constant improvement, and create a suggestion box so that they can offer their ideas freely.
More than that, act on those ideas when appropriate. When your employees see that their workplace is constantly improving, they may feel happier and may be more engaged.
You should also actively look for ways to support your team in their efforts. Try new technologies to simplify processes, improve quality, save money and accomplish other critical goals.
#2 Ask the Right Questions
Many business owners ask how they can make more money, but they really should be asking how they can improve or do a specific task better. The concept of kaizen is the backbone of Lean Thinking, and it relates to a continuous focus on improvement.
While change is important, it should be done carefully and after adequate research and planning have been completed.
A Lean transformation is intentional rather than hasty.
For each current process, ask if the process adds value to the business or to the customer and how it can be further improved.
Create a culture in your office of trying new things to see if processes can be improved, and embrace errors because you can learn from them. Involve everyone in the discussion so that you can get ample feedback about value-added processes, areas to improve on and more.
When your team is fully engaged, implementation of new processes may be completed faster and easier.
#3 Develop an Eye for Waste
In many companies, tasks and processes have remained the same for years or even decades because that is simply how things are done.
Lean Thinking requires you to scrutinize all processes regardless of how seemingly minor or substantial they may be to your operation and ask what you can do to eliminate waste.
Depending on your industry and processes, waste can take on many different forms.
For example, waste may include:
- resources that could otherwise be used in other products, sold for a profit or used in other ways.
- downtime because of inefficiencies in processes.
- the use of parts or materials in the manufacturing process that are not needed.
Because waste can take on many forms in your company, it is important to develop an eye for waste and to identify any aspects of your operation that add no true value.
Even a seemingly small matter can have a major impact on operations.
FedEx realized that its drivers each spent a small amount of time searching for keys each day. They instituted a new rule that required drivers to wear their keys around their necks. While this may save one driver only a minute or two at best each day, the net effect across the company has been tremendous.
Even in a small company, small improvements add up over time. If you make a small improvement today that reduces waste by 1 percent, and you make another improvement in a few weeks that reduces waste by an additional 1 percent, you will notice a marked improvement over time.
Remember that kaizen means continuous improvement, so these small improvements add to future improvements for a profound cumulative effect.
#4 Standardize Your Production
Different types of waste are associated specifically with manufacturing environments. For example, idle time while your team waits for goods to be shipped in or out can result in huge financial loss over the course of a year.
Wasted materials, ineffective processes and other aspects of operations may also be detrimental.
One Lean strategy involves using just-in-time production. Avoid making large batches, and focus on creating a steady workflow. Keep production in line with demand as much as possible.
Lean digital technology is making this easier to do in various ways.
For example, it is now easier to track and control orders with software, production volume, shipping schedules, the arrival of raw supplies and more through digital technology like bar code scanners.
#5 Clean, Rinse and Repeat
Small businesses have more simplified processes and less complex operations compared to large corporations in many cases. Because of this, it may be easier to identify areas that require improvement and to implement your ideas.
This does not mean that a Lean transformation is always easy to do. After all, one identified problem may have several contributing factors that may each require improvement in their own right.
Through Lean Thinking, you do not need to solve all problems at once. Your goal is slowly yet steadily improve operations.
Start with one identified problem that is business-critical, and move on from there. It is critical to create standard operating procedures (SOPs) for various processes, so you can continuously improve those processes over time.
Now that you understand how Lean Thinking can be applied to any size of business in any industry, you may be ready to implement these steps in your own organization.
By focusing on regular improvement rather than accepting things as they are, your business can potentially flourish in the months and years ahead.
About the author:
Lisa Michaels is a freelance writer, editor and a striving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in business and tech. Feel free to connect with her on Twitter @LisaBMichaels.