Business Process Improvement

Is LEAN Business simple common sense? How to grow sales and profits – at the same time

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Tuesday, 27 April 2010 16:58 | Written by Mike Karle

The answer is a resounding YES but the key to success is the HOW…. the HOW to implement, the HOWHOW to communicate and the sustain improvements for the long term.

Let’s start with your business culture…..

I see the culture of an organisation as the key to success of applying LEAN principles throughout a business or organisation, especially to gain long term benefits in growth and profitability. What do I mean by culture? Simply put, the culture reflects the values of the organisation and in most cases the culture reflects the history and the values of the leaders. Or it is simply “how we d things around here…”

If “how we do things around here…..” means:

  • We share ideas and no one has a silly idea
  • We have open communication on a regular basis
  • We are always looking for ways to improve our product or service to our customers
  • We are always looking for ways to be more efficient

then you have a solid foundation to implement LEAN Business principles and get the long term benefits growing sales and reducing costs.

Where to start…..

LEAN focuses on the Voice of the Customer (define the product/service attributes and features) and delivering what the customer is prepared to pay for at the lowest cost. So, the focus is on customer service and reducing unnecessary costs in the business.

When you start to really get serious and detailed about the Voice of the Customer (VOC) you will very quickly start asking questions like “Why do we do things that way?” You will start looking for ways to be more efficient and deliver what your customer needs. To get real solid data on the Voice of the Customer consider surveys, interviews, focus groups and reliable consumer research. The best method will depend very much upon the number of customers you have, whether they are consumers or whether you are more “business to business”. What is vital is to get the whole picture quantified, not just, Quality, Cost and Delivery but other factors such as:

  • Packaging and labelling
  • Invoicing and payment terms
  • Flexibility in service
  • Technical support and after sales support

Having a clearly defined and quantified the VOC then the next step is to measure your current product and/or service offering against the data from the survey. This will do two things for you:

 

  1. Identify where you are not meeting your customers needs – allowing you to do something about it!!!
  2. Allows you to identify what your customer is not prepared to pay for, that is, the non-value add activities. These can be considered a waste and need to be minimised.

This is a starting point for the implementation of LEAN Business, one which will give you a clear focus on what is valued by your customer. You will find that all your staff will be able to contribute positively to this approach so long as the “way we do things around here” matches the four points above.
Look out for more installations of LEAN Business in the near future…..Dave Burgess