Increase Profits By Running Lean Operations
Posted by Brigitte Casemyr on Thu, Oct 07, 2010
“Lean” made its debut in manufacturing processes, and that term has since been propagated to all areas of a company’s operations.
Its cousin, “Efficiency”, is on everybody’s lips, but not surprisingly, business managers often have trouble translating that concept into action. So what are the key steps required to create a lean company? 7QRTWYKQW885
The early lessons (in manufacturing)
- Eliminating waste
- Boost inventory turnover
- Reduce inventory levels
By focusing on achieving the shortest possible production cycle and producing only to meet customer demand, a business will quickly see clear benefits in lower costs, higher product quality and shorter lead times. How does this translate into “Lean Business”?
Becoming a “Lean Business”
Change your processes? Bring on a new tool? It's part of it. The biggest part is adopting a lean culture.And it means that the more people involved in this culture of lean, the more successful it will be. Start with your vision of what the business would look like after adoption and implementation of that philosophy.
A key lean tool is that of “Value Stream Mapping”. This tool allows you:
- to create a map of both value and waste in a given process
- to understand the waste and its causes
- to remove it so that value flows without interruption of waste
This is clearly applicable to all your business processes, internal as well as external such as your interactions with your suppliers and customers.
Finding Value Streams
In order to measure, you have to quantify. Have you been able to quantify how much of your resources go to office and administrative support of customer interactions? Think about your processes in order entry, quoting, planning, purchasing, product development, customer service, billing, etc.
You’ll find greater profits in your operations once you collect data that show the time between receipt of a customer order and fulfillment of that order, and then map your processes. Non value-added steps will most likely jump out at you, and you’ll be able to identify the waste. Collecting data on administrative processes requires breaking them down step-by-step. A customer of ours, Rainbow Symphony, Inc., went through that painstaking process:
“Since the new workflow has been in place we have tripled (3X increased) our order processing capacity and the redundancy in our system has almost been eliminated”
Mark Margolis, Owner Rainbow Symphony, Inc.
Lean goes beyond the shop floor – it’s a systematic approach for eliminating waste. Increasing your profits through the implementation of lean solutions in your administrative processes can be quite simple, and often won’t require great capital expenditure.
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