Sunday, July 5, 2015

LEAN Strategy: An Insurance Policy for Your Business

Think about just how fast Monday morning instantly turns into Friday afternoon. It can definitely be a full time job just filling your customer's orders. Sending them samples and quotes for new business. Buying and paying for raw materials. Doing payroll. Responding to inquiries and complaints.

Common sense tells us that at some point, we need to be working ON the business as well as IN. Most of the factors that dictate success and failure are beyond our control. Think about it. The weather. Hurricanes & snow storms. Wall Street. Did 2007-8 impact you at all? Competitors. They are plotting right now how to eat your lunch. Suppliers. You're one bottle neck away from increased prices. Your customers. They have plenty of choices out there. Things that impact us negatively  come at us without much warning. Whomever responds fastest and most decisively, wins!

A lean business strategy is really life insurance for your business. By working steadily to remove the 8 wastes, the impact of those things we can't control is lessened. For example, the "Great Recession" lasted from December of 2007 until June of of 2009. It  began with an 8 trillion dollar housing bubble bursting. This loss of wealth resulted in sharp cutbacks in consumer spending, which led to job losses.Very interesting year for most. No matter how well run your business was, a huge challenge arose. We also know that when 2008 happened, things would get better. We weren't sure how long it would take, but the US economy always rebounds. Many employees were very concerned about their jobs, since many of their friends and relatives had lost theirs. People were scared, especially as they watched their 401K shrink. It was time for a good news/bad news speech. I gathered people together and told them the bad news was that they were stuck here....nobody was going anywhere, we'll sell the furniture first. The good news is we need to bear down and reduce the time it takes to do all of our thousands of processes. Just keep hacking away at those 8 wastes. (When everything turns around, we'll be in first place!!)

Thankfully, my company had been "doing lean" for several years. All of our growth for the previous four years was accomplished with zero additional people. That meant there didn't need to be layoffs when sales were off 21% in 2008. Thankfully, people had made an investment in working ON the business, having opened and closed hundreds of A3s in the previous years. No layoffs and a small profit. LEAN saved our business! (no wonder people call me a lean zealot!!)

Lean is life insurance, and the improvements you can make today are the premiums. All we need to do is work to get every single stakeholder to spend 15-20 minutes per day working ON vs. IN the business. You'll be more than ready for a rainy day!

No comments:

Post a Comment