How Lean Thinking Can Benefit Your Business

Why should you try Lean for your business? There are many benefits of going Lean. You end up with lower product cost, improved profit margins, improved quality, improved productivity, improved service to the customer, and increased capacity with no additional equipment. Often the benefits of Lean are incremental and not measurable, but over time they add up. Here nine ways Lean can help your business.

1. Lean Frees up Space

One of the typical benefits of Lean is that it frees up space. You have more room to put in more equipment as you grow, or more cubicles if you’re a service type operation.

2. Products Are Created Faster

Products go from raw material to a finished product in a matter of days, not a matter of weeks. The Lean system has you take out all the non-value-added activities you’re doing. This cuts production time down to a matter of days. So you can take an order today and ship it within the week.

3. Product Is Customer-Oriented

The third thing is that the product is pulled through the system by the customer. This allows you to make what the customer wants, when they want it, in the quantity that they want. This gives you minimum finished goods camping out in the inventory and virtually no work-in-process inventory. It also reduces the amount of raw materials you need to have on hand.

4. Improved Product Quality (Six Sigma)

You also get improved product quality. Sometimes we call this the Six Sigma; it’s a statistical method of getting quality in reducing defects to 4 ppm pieces produced or less.

5. Perfect Order Rate

Another thing Lean can provide for your business is a perfect order rate. You will be able to deliver your product on time, 100% of the time.

6. Multi-Skilled Flexible Workforce

In addition, you’ll have a multi-skilled, very flexible workforce. If someone’s out, it’s not going to impact your production. All people are trained in four different levels. The first is Level 1, they go through training. At Level 2, they can do the job with some supervision. Level 3, means they can do the job on their own. At Level 4, they are experienced enough and capable enough to train other people.

7. Self-Directed Work Teams

People can work on their own! These are called self-directed work teams. People know what they have to do and how to do it. They know the best way to do it.

This is how they do it at the Naval Air Station in Jacksonville Florida, when the jets come through for refurbishment. Every 14 days, the jet moves from cell to cell to cell; there are nine cells. When the jet gets to the cell on the first day, the operators in the cell get together and figure out how to get the work done in the 14 days or less. They are incentivized to do it in fewer days, because if they can do it 12 days, then they have two days to relax and get the work area in good shape.

8. Improved Focus

Lean also helps all employees get focused on the goals and objectives of the business. One of the questions I like to ask when I go into a plant is go to a person on the floor, a value-added person, and ask them: “What are the overall goals and objectives of your company?” The second question is, “How does your job help the company achieve those goals and objectives?” If the person on the floor can answer those questions, then Lean is well-implemented. Everyone is involved in hitting goals, from the top person to the people who do the value add on the floor.

9. Maximized Employee Skills

The final benefit of going Lean is that all the employees’ skills, aptitudes, and knowledge are fully utilized. By involving your people and asking them, “How can we help you do your job easier and better?” you will find a wealth of information and ideas to improve employee performance and increase your net profit.

Other Benefits of Lean for Businesses

There are many many benefits to Lean, and a lot of them are related to morale in the plant, productivity of the people, people retention. Is it a good place to work? Do people stay up extra time before they leave work? Do they come in early? You can tell if you have a place that’s a good place to work by just looking at those things.

About Joe Rizzo:

Mr. Rizzo has over 40 years of experience in operations, manufacturing, and engineering. His areas of expertise include high-growth companies, start-ups, turnarounds, new product development, and emerging technologies. He is proficient in world-class manufacturing, strategic analysis and planning, organizational development, Lean manufacturing, Six Sigma, green technologies, and global operations. He is adept at applying cutting-edge technology and processes to transform start-ups into high-performance manufacturing operations.

Currently, Joe provides training and consulting services in Lean and Six Sigma with his consulting company, Lean is Green, LLC. Joe is also the founder and Executive Director of the New England Lean Consortium.

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