Lean - Core Concepts

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Published: Saturday, 21 January 2012 18:21
Written by David DeCiero

     “Lean” is a term that has been used in manufacturing to identify a form and approach to continuous process improvement. Toyota and other Japanese manufacturers made Lean famous as they climbed the ranks of the car manufacturers. This is not meant to be an exhaustive definition of lean, but a focus on core concepts.
      At its core, Lean is about the customer. The key is to do everything based on the customer. This is because ultimately, they decide the success of your business. If a customer will pay for it, then it should be performed in the business. If a customer will not pay for it, then it should not be performed by the business. The best way to imagine this is to have a “little customer” on your shoulder. This way, you can ask this person whenever you are doing something. Ask them questions such as, “Would you pay for this?” or “What do you think?” The point is not to get a little customer, but have them guiding your decisions on products and process, much like the little angels (and devils) that can sit on your shoulder. They are there to remind you of what you are doing and offer a different perspective than you have as the business owner. The customer is central to Lean, you must listen to them and gather their feedback to provide the products and services that they want.
     Secondly, Lean is about process improvement. After answering the question of whether the customer will pay for it, there is a continuous focus on making the process of producing that product or delivering that service better. The process can always be optimized to provide more satisfaction and value to the customer. This may seem counterintuitive, since once a process is optimized, it should continue to be that way as long as we follow the standardized process. However, things change. The available resources may change, technology may change, or anything may change. The point is to always search for ways to make the process better, taking advantage of changes as quickly as possible. There are a myriad group of terms associated with process improvement (muda, muri, mura), but we will not go into those at this time.
     Thirdly, Lean is about the people in your organization. Lean identifies people as the most valuable resource on the planet. The key is to recognize the talent in your organization and culture it. This will provide your employees with a path to growth and learning and provide them with an incentive to work at their highest level of potential. This equates to having employees focus on the tasks that create value. The concept of busy work or utilizing an employee to less than their full potential has no place in a Lean organization.
     This has been an initial discussion of Lean. In a future article, we will discuss process improvement in more detail. These key concepts above, though, should always be kept in mind when wanting to make a more efficient, customer focused business.


Complacency

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Published: Saturday, 21 January 2012 18:20
Written by David DeCiero

     Complacency is the biggest weakness that a business faces. In highly competitive industries, when a business becomes comfortable with its position, it will inevitably start to whither. Over time, a small internal problem eventually grows into a larger problem threatening the business. Externally, competitors will take advantage of any weaknesses and steal market share. Therefore, it is important to be on guard against feeling that the business is “good enough” and requires no updating.
     How does a business owner know if they are being complacent? The first is to ask yourself if you are still asking questions about your business. Do you still strive to find out why something is done a certain way, or just accept that it works that way? Acceptance is another form of complacency. Do you find yourself asking for new ways to appeal to customers or simply accepting your current base? Innovation is the key to any business in a competitive industry, so you must always be thinking of new and different ways to be operating. This can be innovation in terms of customer appeal or in how a particular problem is addressed. If you feel that you have run out of ideas, ask someone else for their input. The complacency doesn’t start when you run out of ideas, but rather when you no longer seek the ideas.
     A peculiarity of complacency is that it is usually borne from dominance. That is, a dominant business usually becomes complacent in its priority position. At the top, a business may feel that it can do no wrong and does not need to continually improve its processes or listen to its customers. Understand, though, that the competition is there and ready to take advantage of those weaknesses as they grow. Your competition is always looking for the “loose brick” in your fortress, and will ruthlessly exploit it until your castle comes down. It is not a failure of a business to have a loose brick, but it is a failure to not correct it before a competitor can take advantage of it. Alternatively, your business should always be looking to exploit your competitor’s loose brick. That way, you can exploit their weaknesses to increase your market share. D1R Consulting stands ready to help you avoid complacency through business process management, competitor analysis and customer analysis. We stand here ready to help you avoid complacency by asking the right questions and optimizing your business.