All the companies today constantly face competition & continuous change in macro-economic conditions which is a constant challenge for them to maintain the viability of their business model & survival in the long run. To overcome this challenge companies today consistently need to be more agile, fast in responding to customer needs, competitive on price bringing value to the customer. For doing so they continuously need to work & improve upon productivity, speed & cost efficiency maintaining quality of their products & services. LEAN is a business improvement philosophy which facilitates all of these by focussing on elimination of waste from being built into the system. Waste is regarded as non-value adding in operations which not only slows down the process but also adds the cost which otherwise can be avoided. Some studies suggested that added value takes place around 5% of the time within a process or operations and the remaining 95% is waste. LEAN is based on following principles: Specify & deliver value as seen by the customer. Identify and create end to end Value Streams. Make the value flow from raw material to customer – eliminate waste. Pull Production not Push. Strive for Perfection : continual improvement. Customer sets the value & LEAN makes a value stream flow from raw material to finished goods eliminating waste along the entire value stream instead of at isolated points, creates processes that need less human effort, less space, less capital, and less time to make products and services at far lesser costs and with much fewer defects, compared with traditional business systems. Companies are able to respond to changing customer desires with high variety, high quality, low cost, and with very fast throughput times. With all this simplification in business operations & processes, automation & information management becomes much simpler and more accurate providing a right platform for cost efficient digitalization. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste & LEAN helps you in working towards exactly this stage of business nirvana.
Lean Transformation for Manufacturing and Services
A popular misconception is that lean is suited only for manufacturing. Fact is Lean applies to every business, every industry and every process. It is not a tactic or a cost reduction program but a way of thinking and acting for the entire organization. LEAN is the way most of the profit making companies choose as their way of operations. All the businesses today whether government or private, manufacturing or service, healthcare or finance or any other type are using LEAN to meet the demands of their customers at the right time, right price with right quality. LEAN Transformation is when a company moves from their conventional way of working to LEAN thinking. It requires a complete transformation on how a company operates & conducts business which takes a long-term perspective and perseverance to successfully transform.
If a company properly transforms to LEAN thinking & way of work, the financial benefits are highly significant. The reduction in waste and defects saves operating cost, money saved on product inventory & storage adds additional cash flow to the balance sheet. This money can provide financial strength to the company & some part of it can be further invested into:
- quality improvement of their existing products,
- research to provide customers with newer & technologically advanced products,
- development of people making them future ready,
- standardization of work practices & digitalization for better work life balance for employees.