Going Lean Today to Beat the Recession

Going Lean Today to Beat the Recession

Times are tough for many manufacturing companies right now, and when times get tough, many organizations look for the fastest and easiest way to save dollars, and therefore go through a downsizing. This is a natural reaction as executives try to implement damage control, and retain market share and stock values.

Leaders with a good business sense realize that layoffs should be the last resort. People are the knowledge base and true asset of any company. When people are laid-off, it builds resentment in the people who were asked to leave, and fear and mistrust in those that were allowed to stay. Productivity and innovation drop tremendously and the dedication of employees deteriorates. With this detrimental impact, it is difficult to understand how companies make the decision to layoff their talent and reduce their capacity to respond to new growth opportunities. Then as business picks up in the next cycle, many companies who have downsized will find their organization lacking in talent, and ability to respond to customer demand extremely difficult and costly. Often companies who choose to downsize will lose customers after a recession is over to stronger competitors who have adopted Lean, and created new capacity and strengthened their workforce.

Applying and using Lean training and techniques during a recession dramatically increases your capacity, problem solving abilities and business fundamental expertise without having to add more people. Implementing Lean training during a recession simply builds capacity without major capital investment and/or increasing staff levels and provides a competitive advantage for growth when the economy improves. Organizations who have adopted Lean as their operating strategy do not stop 'Lean' as a recession occurs. These companies really understand the benefits that Lean can bring in an economic downturn. Lean is a philosophy of investing in your people. This investment will provide a payback through a workforce focused on continuous improvement and innovation.

In today’s business environment, it is more important for manufacturers to explore continuous improvement and Lean operational excellence programs. They must be able to recognize the problems they face, as really “Opportunities”. This mindset is critical to a successful Lean Transformation and sustainable growth for any organization. Knowing where and how to recognize the “Opportunities” and to begin the cultural transformation can be challenging. With that in mind, here are Leanovations 8 critical requirements to address the challenges facing U.S. manufacturers today and for them to be well prepared when the economy improves with new business growth opportunities by "Going Lean Today to Beat the Recession!"

#1: Develop clear business goalsThe first step of any Lean transformation must be a clear definition and thorough understanding of the specific issues the organization will address. Once this is established, the Lean implementation plan must set a realistic timeline for the accomplishment of these objectives and provide the proper tools, skills and support required to be successful. Utilizing cross-functional Kaizen Teams is necessary for cultural change. Kaizen is a Japanese word meaning continuous improvement.

#2: Develop a Lean Leadership roleManufacturers that have successfully sustained a Lean culture throughout their organizations recognized early on that creating a Lean Leadership position within the organization was critical to the program’s success. To ensure that the investment in Lean teams delivered positive results, successful organizations purposely implemented a Lean Leadership position and initiatives along with their Lean strategy deployment.

#3: Involve factory floor personnelSustained and lasting improvements in Lean manufacturing performance requires the full commitment and involvement of everyone in the organization, especially the employees on the shop floor. Factory workers, in particular, are a source of considerable expertise. The level of employee involvement must be sincere and comprehensive. Factory workers must feel that they can make a difference and should be involved in the decision-making process.

#4: Develop real-time visibility into production performanceLean Manufacturing needs real-time and visible metrics with simple analytical tools enabling factory workers, supervisors and managers identify quickly root causes of a problem. By providing factory workers real-time visibility into production performance, manufacturers can ensure that the right people are able to take the right actions at the right time while also adding intelligence to the solutions.
A Lean environment is a Learning environment

#5: Provide information to take action quicklyA decision not followed by action, is not really a decision. While real-time visibility is essential for Lean success, visibility without action is futile. Providing factory workers with information about how they are performing not only reduces anxiety, but it also delivers the needed incentive to take appropriate and timely action. It is vital that the action for change is quick and in a manner, that supports visible accountability with senior management. Organizations must also empower factory workers to take actions that are within their immediate sphere of influence.

#6: Executive sponsorship must be a daily focusSecuring executive sponsorship is essential to the success of any Lean transformation. Executive sponsorship helps reinforce corporate vision and creates unity across cultural lines. A committed executive can set the standard for Lean and Kaizen project success. He or she has the authority to allocate resources, remove obstacles, handle contingencies and drive key decisions that ensure a successful implementation.The commitment must go beyond the initial stages of Lean implementation. It must continue throughout the Lean transformation and must become an everyday focus.

#7: Employ a practical, simple implementation processFacing relentless pressure to improve business performance; it is common for manufacturers to set high expectations for their Lean transformation. Manufacturers that have successfully embarked on their Lean journey, however, do not try to do too much, too quickly. Lean is a journey not a destination.

#8: Maintain the momentum and commitmentSustaining Lean transformation strategy requires that the people involved maintain their momentum and commitment to the goals. Organizations that utilize the Kaizen team events and honor the process are the most successful. Many initiatives start well and then quickly decline as teams become lost in other resource drains. By having Kaizen teams focusing on quick wins, and building upon success that supports the shop floor, a foundation for delivering a broad scale Lean transformation is established.