Going lean makes your business competitive

Shelter Chieza : Change  Management

The challenging economic situation has forced companies to tighten their belts in a bid to remain operational.

Words such as downsizing, cost cutting, right sizing are now very common in business as companies go for leaner structures.

Most companies are looking at ways to trim their operation and some of the things that have been previously tolerated are coming under heavy scrutiny.

For instance I have heard of management structures where a general manager has two personal assistants. The limited resources at the disposal of most companies has forced them to rethink about such issues.

While previously the justification for having two assistants have been the size of the organisation, dwindling bottom lines can no longer afford such luxuries.

New businesses are therefore going for the lean structures where one person performs two or three jobs as well as cutting out things that push up costs and prices unnecessarily.

Low cost airlines, some of which have opened new local and regional routes, have perfected this art.

They have eliminated things that passengers are offered by large airlines which they do not necessarily need or use but are made to pay for such as food over shorter routes of an hour and luggage in a bid to offer cheaper and affordable fares.

A company that segments their customers is well aware that there are individuals that have a desire to fly locally that may not necessarily need the pampering that long haul flights offer.

Going lean makes you more competitive and better prepared to weather any economic storm.

Some companies have been forced to retrench despite them not having the money pay off the retrenched workers. Laying off workers is an expensive option, and so is keeping the excess fat.

But companies don’t have to go through all that if you they constantly review their options and carefully plan any new investments.

Going lean is increasingly becoming a very popular business improvement practice. You can imagine the operational efficiencies it brings to your company.

There are, however, some unnecessary steps that companies adopt into their systems. These ultimately delay turnaround times and increase costs.

Most companies are changing strategy as they go along. A company’s core service could be advertising consultancy.

Today they could add an extra printing service because the boss travelled to China for his vacation and saw a discounted industrial printer and felt it was too good a deal to pass up.

If that alone is not enough, they decide to venture into shirt printing service tomorrow, after all it’s in the “same line of business”.

What is happening to this company is a random and little rationalised “expansion” that precipitates failure.

A company that takes this route is accumulating waste and making unplanned purchases, support systems, engaging additional employees, which affects it bottom line.

As leaders, managers must be willing to take the lead in introducing lean structures within their organisations.

One successful company launched the lean system using an example of the bathroom. The manager decided to take a brush to demonstrate how one single brush can clean the whole toilet.

Further to that, they encouraged workers to upload videos they have made in promoting lean practices within the company on a Facebook page.

There are processes that organisations must eliminate. Another printing firm realised that their quest for lean structures could not be complete if they did not look at their value chain system.

Thus they eliminated things like getting approval and nod from both the general manager and production manager to approve of quality assessments before delivery to the customer.

In most cases these approvals may only require an astute production manager. They also addressed their labour intensive packaging.

The cling film plastic wrapping on top of the foil wrapper was marked for elimination, it almost seemed like a double packaging.

This not only lowered their packaging costs but labour too. An option would be to explore durable packaging options.

If manufacturing environments could decrease the amount of paper on the shop floor it would help in making savings.

Going lean is a practice that the Japanese mastered very well. In our country, it should not be viewed as a foreign practice, going lean can be achieved in today’s complex, dynamic business environment.

It is possible to shift to long-term arrangements with key suppliers. If you want to do lean, it puts you in a more competitive position.

However, the way you introduce it within your company matters because you are dealing with different attitudes and mind sets.

You must, however, look beyond the narrow objective of cost savings. You must set a course to attain broader results by creating dynamic business capabilities and strategies that are critical to attain stability and growth. It provides a balance in a business world that is uncertain and ever changing.

 

Shelter Chieza is a Management Consultant. She holds over a decade of Management Experience. She can be contacted at [email protected]

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