Slim down for success

Lean and mean key to surviving hard economic times writes Steve Allcock, managing director of freshbaked Business

The events of the last few months can only be described as a perfect economic storm. Both large organisations and SMEs in Wales went from planning their next expansion to putting projects on hold and cutting production, seemingly overnight.

The current economic climate is causing organisations to refocus their business operating models with a switch in emphasis from the top to bottom line and the boardroom agenda has changed as businesses tighten their belts.

While some industry sectors are more resilient than others, the focus for all should now be on managing costs, controlling expenses and improving efficiencies. As business slows down, there are opportunities for organisations to employ continuous improvement techniques in order to have an immediate beneficial effect and establish a framework for lasting success.

Through the use of Lean and Six Sigma principles, organisations can dramatically improve their business performance by improving processes and eliminating waste which in turn reduces process variation, drives cost out of their products and prevents defects.

Using techniques first popularised in the UK by Toyota to streamline its manufacturing processes, business improvement techniques, such as lean manufacturing, can both improve productivity by eliminating non-value added activities and boost employee morale and motivation.

Such techniques involve a new way of thinking and a significant culture change in order to reap the major potential benefits to both employer and employee. If you fail to prepare the corporate culture for change, then methodologies such as lean will not succeed.

For lean to work, the focus of the senior management team and leadership is critical as how people respond to change is dictated by this. While it is essential for the CEO and senior management team to shape the culture of an organisation, the best people to deliver any culture change and process for lean or continuous improvement are internal staff as they are the ‘process experts’ in their field. The primary objective of any of the business improvement techniques is to improve business performance as a whole and this can only be done by empowering the people that make up the DNA of the organisation.

In order for businesses to survive these times of economic hardship, it is crucial to improve the efficiency and output of its operation. Providing a diagnostics of the manufacturing processes is the first step in doing this, before devising a training programme to improve the overall productivity and efficiency of the operation ironing out waste and defects.

A review of an organisation’s processes by means of ‘process mapping’ will help to visualise the current flow of materials and information before a ‘perfect process’ is created, which cuts out any unnecessary stages, questions time-delays and over-inspection and replaces any unnecessary control with trust.

Designing the perfect process has many advantages as it allows an organisation to look at what it currently does and how it can enhance its capabilities. A lean organisation is one where, at any time, those who work the process can apply ‘process mapping’ or variants of this to their core work activities. All businesses are driven by hundreds of processes but focusing on the core six or eight processes will create a lean culture.

It is not just those organisations in the manufacturing sector that can benefit from being lean. The lean concept has an incredible opportunity for improvement in most service led businesses. Whether a business is a call centre or a finance provider, often there are too many steps that exist in the process, maybe because managers don’t trust their staff so unnecessary elements of inspection and approval exist.By creating the perfect process and cutting down on any unnecessary steps, not only can you improve the efficiency of your output but you can make a significant impact on customer service.

During this volatile economy, it is essential to create a sense of urgency to make such improvements. A company culture that strives to meet deadlines, improve efficiencies and push continuous improvement will have an advantage over a company that reacts to problems or slowly improves. Having a compelling desire to make changes is only one component, however. Other components include being clear and precise about goals, setting specific completion dates and holding employees accountable.

This harsh economic climate requires businesses to really focus down on what improvements it needs to make in order to ride the storm. When business is quieter, it is the ideal time to work on making internal improvement practises to increase production capacity through enhanced efficiency. By making these changes only then will businesses be able to not only survive the current downturn but emerge from it in a stronger position.