“There is nothing so useless as doing efficiently that which should not be done at all.”
– Peter F. Drucker, management consultant, speaker, and author
As you begin to explore the value of implementing Lean Management into your organization, two questions likely come to mind:
- Why do it at all?
- Will it work for my business?
The first question is easy to answer: Lean as an approach is well proven. An untold number of businesses have successfully ‘gone Lean’ to systematically increase efficiency, reduce waste, better serve the customer, and continually improve processes.
Five key principles of Lean:
“Precisely specify value by specific product, identify the value stream for each product, make value flow without interruptions, let customer pull value from the producer, and pursue perfection.”
– James Womack, Daniel Jones, and Daniel Roos, ‘The Machine that Changed the World’
The point is, Lean works. The caveat is that it works best when the processes and methodologies are applied correctly and used by the stakeholders in an organization. The greatest tools in the world are useless if they’re used incorrectly or left in the toolbox. Or, even worse, if the processes are designed poorly and the methodologies run counter to the objectives in mind.
As statistician and management guru W. Edwards Demming once said, “A bad system will beat a good person every time.”
That brings us to the second question: How do I know if Lean will be beneficial to me and my organization?
From our view, the optimal way to make Lean part of any business is to embed it so thoroughly in the culture of the organization that it becomes second nature. Over time, it should become impossible to imagine operating in any other way. That’s how transformational Lean can and should be.
Starting with that perspective, it becomes obvious why it makes sense to “go Lean” at the same time stakeholders select a best-in-class ERP system.
“To be competitive, we have to look for every opportunity to improve efficiencies and productivity while increasing quality. Lean manufacturing principles have improved every aspect of our processes.”
– Cynthia Fanning, Production manager, GE Appliances
How Do I Get There?
Many of the same type and degree of analysis which goes into reviewing, selecting, and then customizing an ERP applies to implementing Lean. Here at Attivo, we’ve seen the biggest transformations by doing both simultaneously.
To decide how the five principles of Lean can most effectively be applied to your business, an evaluation must be made of how you’re doing business now, what operational inefficiencies are hindering growth, and which managerial blind spots exist. A universally accepted model to accomplish this is DMAIC:
Define, Measure, Analyze, Improve, Control
Also referred to as Six Sigma or ‘Lean Six Sigma’, DMAIC is a data-driven quality cycle almost entirely focused on improving processes. Being that Lean and ERP are all about process, from defining them, architecting them, and measuring the outcomes achieved, the usefulness of DMAIC to our task at hand is obvious.
In our next installment we’ll apply the DMAIC approach to lay the groundwork for determining how Lean can most effectively take your organization to the next level, both as a model and within Attivo-All-In-One.
Lean as a competitive advantage
Not all businesses have embraced Lean. Why? Informal surveys have identified a wide range of reasons Lean and Lean Six Sigma have gone unused at manufacturing and distribution companies. Many admit they were unaware of the model while others worried it wouldn’t deliver results. Still others felt they were too small to benefit from it or that their workforce wouldn’t embrace it. Even those interested felt it might be too expensive to implement or would take up too much time to put it in place. Despite these responses, a Comdata study of manufactures from 2011 showed that fully 71.6% of the 1,100 companies contacted were using Lean practices. Another study found that companies said they had achieved ‘operational excellence’ due to these factors: 1. Tight focus on streamlining processes, 2. Fostering a highly organized work environment, and 3. Dedication to ongoing continuous improvement.
Perhaps one of the most relevant questions to ponder is whether your competitors are Lean or even using a customized ERP to enjoy the advantages of greater efficiencies and happier, well-served customers?
Attivo All-In-One, powered by SAP Business One has the most powerful and fully integrated analytic and reporting tools in the ERP software sector for small to mid-sized businesses. This makes it easier and more efficient to design and implement customized quality control processes and methods across your organization.