Lean at an Enterprise Wide Level
October 22, 2013
The old saying that life doesn’t come with an instruction manual is equally true in business. Yet every day, business leaders the world over are tasked with figuring out how to outperform their rivals. Success in business may not be as simple as following a universal format, but even a cursory study of world-class organizations will uncover some common elements. One of these is an ability to clearly express company value. Another is continuous improvement, typically achieved through Lean manufacturing.
Several foundational elements in the continuous improvement process can be achieved through Enterprise Wide Lean (EWL) initiatives. Unlike point-based Lean Manufacturing solutions, EWL engages the entire organization to focus on meeting customer needs. When successfully implemented, it produces a cultural shift in an enterprise’s mindset, encouraging stakeholders throughout the business to understand value creation, work to eliminate waste, and seek a common vision of continuous improvement.
In other words, companies on this type of Lean journey strike a balance between strategy, people, and processes.
The benefits of Lean can be significant when you connect the dots between activities—the application of the Lean tools—and actual business improvement. Organizations that have successfully undergone EWL transformations report annual productivity increases of up to 30%, on time delivery approaching 100%, and inventory reductions of more than 75%, among others.
Lean is forward looking
Perhaps the most important part of getting started is coming to terms with the promise Lean holds when applied as an enterprise-wide undertaking. The process is inherently forward-looking, even while it scrutinizes the current state of so many operational aspects. For this reason, EWL requires not only the buy-in, but the active, engaged involvement of management at all levels of the company; the resulting shift is cultural as well as operational.
Indeed, EWL initiatives are at their most effective when they connect operations, marketing, finance, and even sustainability elements within a business. This level of collaboration is an important step in identifying critical issues that may be inhibiting improvement, even among administrative and other, non-manufacturing activities.
In some cases, businesses new to Lean may fall into long-held assumptions about the best ways to increase efficiencies. As an example, consider the all-too-common strategy of adding capacity through facility expansion. With the proper application of a top-down Lean initiative, it is often possible to achieve similar productivity gains within an existing plant.
Moreover, there are links between continuous improvement and top line growth. If your business seeks to grow through increased efficiency but maintain its current footprint and employee count, a properly executed Lean effort can create capacity and/or improve profits. Companies are positioned to fill the new found capacity and leverage the additional revenue to develop new products or open new markets.
“In a sense, you’re moving money from the bottom to the top line,” says CONNSTEP Business Growth Consultant Bill Caplan. “Most people say continuous improvement is about efficiency; that’s true, but more important is what you do with that efficiency.”
At CONNSTEP, our mission is to help Connecticut manufacturers sustain themselves and build profitable growth. We do that by becoming their business partners, and, in many cases, their mentors.
“We take on that responsibility free-of-charge,” says Bonnie Del Conte, CONNSTEP’s President and CEO. “We invest time in an organization through partnership. We’re here to help business leaders make the right decisions.”
Our desire to help is not just our mandate; it’s in our DNA. To learn more about CONNSTEP and our range of Lean and Continuous Improvement services call 800.266.6672 or click today.
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