Leanovations E-Lean Newsletter Articles

Lean is a Growth Strategy Not a Cut and Slice Process

When Lean is applied properly it creates profitable growth opportunities for a company. Lean is a dynamic and constantly improving process dependent on the understanding, involvement and engagement of all the company's employees.

At Leanovations we teach, coach and promote Lean as a "Growth Strategy", not a "Cut and Slice" cost reduction process. We help organizations develop a culture that wants to create new capacities and skills to grow profitably. In order to create new capacities and skills we teach organizations how to identify and eliminate waste from the total value stream. By doing so we promote the revenue generating opportunities a company has created by eliminating wastes, and we do not make the focus on cost reductions. Those companies, who are utilizing Lean as a cost reduction program and not a revenue generating opportunity, just do not understand Lean and will quickly lose the employee involvement required to create a Lean Learning Culture. We believe for a successful implementation of a Lean Learning Culture, it requires that all employees be trained to identify and eliminate wastes from their day to day work processes at all levels in the organization.

The best way for individuals to learn how to eliminate waste is through participating on a one week "Kaizen Team", which emphasizes employee participation on a cross functional team focused on a single subject/area. Through a Kaizen Team event participants learn by doing, developing a culture of teamwork while achieving greater productivity. Repeatedly, Lean demonstrates it works, as many companies that embrace Lean can gain 15%+ year after year growth, while the US GDP increases at a rate of 3-5% year after year. Lean is about changing principles and attacking waste in your value streams. It means totally changing the way you look at things, but once you learn how to see waste, you can eliminate it and become competitive.

Economic cycles will always mean there will be difficulties, such as the U.S. economy has experienced since mid-2008, and we will always be at the mercy of economic forces. However, those companies that are running Lean have an extra insurance policy. In a rough economy or recession, companies that are Lean will fare better than those companies who are not.

Leanovations can share a number of compelling cases of how Lean initiatives have really paid off by insulating many of the companies we are working with from economic troubles. For many the recession has actually provided new market shares from their competitors, who continue to lay off workers reducing their capacity and capabilities. The majority of the companies Leanovations is working with increased employment and sales through organic growth and now find themselves in a position to create new growth through acquisitions. Their ability to stay strong through the recession with Lean as a growth strategy has placed them in a position to acquire weaker competitors who may have used Lean tools as a cost reduction program (thus eliminating employees and capabilities to respond).

When properly applied, Lean helps to bring products to market faster which allows companies to capture more of a market share and it results in better asset velocity, which drives cash cycle conversion, and we know that in all business cycles, "cash is king." If you are interested in learning how Leanovations can assist your company, please go to www.leanovations.com .