Date: 2011-02-21
Jim Lewis, usti@wmis.net
It’s a question of growth and lean thinking despite the economy.
Lean is a team-based business philosophy and a successful lean transformation requires a team that includes all internal resources and at least one external expert.
These may seem like silly questions given the difficult economic times in the furniture industry, but how many of you are actively trying to grow your business? How many of you believe you can grow your business right now? Those are two entirely different questions, yet they are similar when lean thinking is applied to answer them.
It may not be so much a question of whether it’s possible to grow a business right now as it is defining the strategy to accomplish growth. There are growth opportunities in our industry. You can export, use the core competencies of your business to expand into other segments of the industry, broaden the base in your current segment, develop alliances with other manufacturers, or employ other creative and innovative sales/marketing techniques.
As you investigate a solution that fits your business make sure lean thinking is at the top of the priority list. Remember, perpetuating poor business practices on a larger scale in your current segment, or in any other segment for that matter, will always deliver unsatisfactory results regardless of how determined you might be to succeed.
Lay the foundation
Before embarking on business growth of any kind, it is important to ensure existing resources are as productive as possible. Productive, in lean language, means creating the most value possible in the time available. To be productive requires a well planned and executed approach to the elimination of all of the waste and non value-adding activity that is present in the current process. Regardless of how well you think your business is operating, I can guarantee you that if you have not embraced the lean business philosophy, there is a lot of room for improvement.
There are numerous resources available to help you along the Lean journey. However, I don’t recommend that you study every book available and then try to implement change in a vacuum. Lean is a team-based business philosophy and a successful lean transformation requires a team that includes all internal resources and at least one external expert to insure that you navigate around all of the bumps in the road without getting stuck along the way.
Increased profit pays for lean
Your lean journey should be able to be paid for many times over through increased profit, but an initial investment is required to get started. Money may not be allocated in the budget for lean, but there are other budgeted items that can be shuffled without impacting cash flow to cover this much-needed investment in the future of the company.
Since the focus will be positioning the company for growth, you might consider diverting money from the marketing budget to support the transformation process. Also, since lean is about maximizing existing resources rather than employing the latest technology, replace the new equipment line item with a lean transformation project.
The point is that if your company has not yet embraced lean, don’t expend your energy and scarce financial resources chasing fixes that will only deliver a short-term cure to your lack-of-competitiveness ills. Instead, invest in lean and reap the benefits of a self-sustaining continuous improvement culture for years to come.
Once you have reduced cost, increased capacity, achieved 100 percent on-time order completion, and enhanced quality through the lean business philosophy your company will be in a position to grow and prosper while the competition scrambles to catch up.
Updated: Oct 30, 2012
This article appeared in CabinetMakerFDM, February 2011. ©Copyright 2013, All Rights Reserved.