How Does Lean Support Your Company Strategy?
Glenn Gooding, a Managing Consultant of Renault-Nissan Consulting, discusses Lean in your company.
It’s been proven and well-documented that incorporating Lean practices or the principles of Lean Six Sigma into your organisation can bring a wealth of benefits including increased efficiency, productivity and profit. But how does the model work in tandem with a broader purpose and company strategy to help your business succeed?
The Difference Between Lean and Corporate Strategy
While a business strategy is usually a written plan for executing actions and achieving specific goals within a certain time frame, implementing Lean into your organisation is a more cultural, long-term shift. The Lean model helps you build a roadmap for creating efficiency, improving customer experience and reducing waste before implementing changes to the way your departments, functions or employees operate.
Making Changes for the Better
One of the defining characteristics of the Lean model is business improvement. Lean principles are based on the belief that an organisation can continually assess the way it operates, how much it spends and the resources it requires. This, by its very nature, means the Lean approach can help any organisation reduce its cost, improve performance and increase profit.
This is one of the most significant ways that going ‘Lean’ can support your company strategy, because it’s quite likely this will include growth or profitability driven by productivity and efficiency.
Organisation and Management
Standardised processes are crucial when it comes to the implementation of Lean principles in your company. And although these are continually reviewed in order to identify areas for improvement, they allow employees to follow precise, tried and tested procedures. For your strategy, this means less time spent figuring out the best way to complete regular tasks and more time to work on achieving results and objectives.
A Versatile Model
The principles of Lean were developed and refined in the manufacturing plants of Japan, where leaders identified and then implemented standardised methods of production. These led to significant savings in time and cost, so ‘Kaizen’, the concept of Continuous Improvement, was replicated in factories around the world.
However, the principles of Lean are not exclusive to manufacturing. Any organisation, from schools to investment banks, can utilise the principles to reduce waste, cut costs and provide a more seamless supply of goods and services.
From Efficiency to Profit
It’s common to include targets in a corporate strategy, such as percentage increase in sales or a rise in profit margins. In general, Lean principles can help achieve these measurable objectives because the business model ensures your organisation reduces waste.
By implementing a Lean model, you can lower the cost of producing goods and services by eliminating any unnecessary time or money spent during production. In turn, this will help to cut costs, increase profit and therefore contribute to your strategic goals.
The process of creating a Lean culture within your organisation involves finding and providing solutions to any obstacles that get in the way of efficiency or productivity. This helps to instil everyday problem solving into the DNA of a company. And when problem solving becomes the norm, your organisation is more likely to meet more objectives and follow a strategy with success.
Lean manufacturing forces you to attack an issue and continue to investigate it until it has been eliminated. Root cause analysis and cross-functional teams are utilised to ensure a problem receives the level of attention it deserves to correct it.
Employee happiness and morale is likely to be part of your company strategy. A Lean approach can be applied to every area of your business, meaning each team member can contribute to improved efficiency and productivity. In addition, the principles of Lean, which focus on standardising processes that work and reducing waste, are easy to comprehend and apply to day-to-day tasks, no matter what role or department an employee works in.
The principles of Lean also encourage people to fix anything not currently working. By learning to overcome obstacles, solve problems or make improvements, employees not only contribute to a Lean culture, but to the success of the entire organisation.