by Art Byrne
The answer is...yes. In fact, the lean approach is the greatest strategic weapon in running any type of business that you will ever see. The strategy for any business starts with the conditions it is facing in its marketplace and explores the best approach to overcome these issues to succeed.
When Taiichi Ohno was helping to create the Toyota Production System as we know it today, Toyota faced the challenge of how to produce a high variety of models with short runs at low cost with out access to big capital spending.
Your company will have other issues. Perhaps you have quality or customer service issues; you might be lagging the competition in new product introductions. Whatever the situation, you need a strategy that enables you to deliver more value to your customers than your competitors can over long periods of time.
How lean fits with this is simple. All you are trying to do is to teach your people how to see and remove the waste from all our processes, to deliver more value to our customers. The focus of a lean company is always on the customer.
The daily work of the lean company is all about removing the waste that exists in every one of its processes. As waste is removed, the time and cost required to do any type of value-adding work is reduced. At the same time, the quality of what is produced is vastly improved and creates a noticeable strategic advantage vs. the competition. As a result, the lean company also competes on time.
For example, as waste is removed, lead times that used to be six to eight weeks, and still are for the competitors, can be reduced to one to two days. This allows the lean company to conform to the wants of the customer as opposed to having to come up with ways, often through some form of price concessi on, to get the customer to put up with the six-to eight-
week lead times. Whenever the competitor stumbles and is out of stock, the lean company can respond instantly and grab the business and do it without having to discount. In addition, as more waste is removed, the lean company will be able to introduce more new products faster than the competition. Over time, the lean company can put itself in the position where its competitors are forced to follow its product introductions but can never quite keep up.
This product leadership will be noted by the customers, and the lean company will gain market share.
So, when I say lean is the strategy, it doesn’t mean that you must give up all the things that you now see as strategic. You can still open new markets, introduce new products, improve your quality and customer service to be easier to do business with, or pursue selected acquisitions.
None of that changes. It is just that by focusing on lean, i.e., removing the waste on a daily basis, as the core strategic approach, all the things you consider strategic now will become a whole lot easier to do. In addition, new opportunities that you can’t even conceive of now, like having a one-to two-day lead time vs. your current six to eight weeks will open up for you.
Unfortunately, most companies still see lean as primarily a cost reduction program and not
something strategic. As a result, they will suboptimize their lean efforts. It is easy to see where this thinking comes from, as removing the waste from all your processes and focusing on delivering value to your customers has the big side benefit of delivering significant cost reduction.
Even so, it is just that, a side benefit – you need to think of lean as strategic.
Let me give you an example. Two companies — A and B — buy the same equipment from an
outside vendor. The only difference is that company B has used its lean approach to cut the setup time on the machine to one minute, while its competitor, company A, takes one hour to change over the machines.
Now say that each company can only allow one hour per day of downtime for setup. Who has the lower cost: A or B? And who has the better customer service (keep in mind that A can only make two different products per day while B can make 61)? Now, if B has the lowest cost and best customer service, is this a strategic advantage or just some manufacturing thing? After all we are only talking about setup here, yet we created significant strategic advantage.
Think about it. I think you can start to see lean in a much more strategic light.
Art Byrne is the retired CEO of The Wiremold Company where his lean strategy increased enterprise value 2,467%, boosted sales from $100 million to $400 million, improved productivity by 162% and made dramatic gains in lead time and inventory turns.
He is also the best selling author of The Lean Turnaround and The Lean Turnaround Action Guide.
ความคิดเห็น