A few years ago, the Clinton Global Initiative announced a national program aimed at helping schools, hospitals and other nonprofits stretch their dollars further.
I took special note of this because the program was in partnership with Toyota and featured the Toyota Production System (TPS).
The initiative, TPS was successfully applied at a New Orleans recovery organization, a community food pantry in New York City, and a hospital in Pittsburgh.
Having had success with TPS at the core of our company I couldn’t agree more with the experts who believe it can be applied to other organizations.
TPS is designed to reduce cost by eliminating wastes with the goal to have the highest quality product at the lowest cost possible with the shortest lead-time.
Becker’s Hospital Review outlines five key principles that hospitals - or any organization - can learn from the auto industry.
Lowering costs, increasing employee value, and a dedication to continuous improvement should be a priority for any successful leader. In turn, it is what will help create successful companies.
What steps can your company make to begin applying Toyota Production System (TPS)?
What happens to Lean strategy in the event of an inventory shortage?
Companies that have too little product on hand also experience waste.
Specialist retailer Lululemon shaved inventory margins too close. As a result, customers and investors are disappointed and the company has been forced to waste money on shipping products by air rather than by sea.
A strategy of lean inventories in stores became problematic when supplier issues and a website migration caused widespread dissatisfaction with a lack of inventory both in stores and online.
As the Lululemon case demonstrates, perhaps the greatest peril of understocking lies in the unsustainable additional costs imposed when a company must scramble to restock empty shelves.
Whether it's shipping expedition or overtime payments to workers, any disruption in your supply chain that creates a "rush job" will cost you. This waste is avoidable through proper planning and product flow.
Another risk, more subtle but equally perilous, is that of overwork. Lean management identifies overwork as wasteful for good reason. It contributes to high turnover (possibly the most wasteful of all personnel programs) and leads to accidents if tired workers make mistakes. If a company runs low on inventory and must increase production to fix the oversight, laborers will be overworked.
Lastly, understocking creates waste in that it needlessly damages customer perceptions, forcing additional work and additional costs just to regain your previous perception.
How would you feel about a company whose products were unavailable when your car was broken down? If the part you need is nowhere to be found from your preferred manufacturer, brand loyalty is likely to fall by the wayside as you scramble to repair your vehicle.
Lean management is about customer defined value, and a basic component of value is availability.
So, what is a Lean manager to do? How can one stock just enough products without leaving shelves bare or products gathering dust?
There is no single perfect solution, but the following best practices will help:
For workers accustomed to traditional management, it may seem difficult or even impossible to stand out in a Lean environment. The traits that impressed prior supervisors make nary a ripple. Particularly for those transitioning into manufacturing from a different industry, this phenomenon causes frustration.
Lean managers may seem indifferent, but that perception could not be farther from the truth. In reality, they are big-picture thinkers continually evaluating and reexamining many aspects of their direct reports' performance. To impress a Lean manager, you must excel within the framework of Lean thinking.
Learn Lean Philosophy and Vocabulary
Employees new to Lean may find "muda," "kaizen," and other Lean management terms incomprehensible. Resist the impulse to resent others for speaking in language unfamiliar to you. Instead, take time to research the history of Lean. There are many books on this subject that can be read free online.
Not only will learning about Lean make it easier for you to convey your existing strengths and ideas, it will lead you to new insights. Combine the unique experience you bring to your new position with Lean ideals and philosophies. Soon, you will find your managers noticing how you use your skill sets to enhance Lean procedures.
Identify Waste
As you adapt to a Lean environment, keep a watchful eye out for sources of waste. If you have an idea that would reduce, for example, unnecessary movement, speak up immediately. In Lean environments, all employees are encouraged to share their observations to save time and money for the business. You will stand out both for the practical benefits of your idea and for your understanding of waste reduction's importance.
Timing, Timing, Timing
Lean managers work on a tight schedule, demonstrating to their direct reports that they are willing to hold themselves to the same high level of efficiency they expect from others. Emergencies excepted, it is best to avoid interrupting a Lean manager's strictly timed routines. Even the best idea you've ever had can probably wait until your supervisor is scheduled to be available.
Ask when it is best to contact your manager each day. Suggest sharing an Outlook calendar that lists "open door" hours when you can have unscheduled check-ins. Alternately, ask permission to place an appointment on your manager's calendar for a daily 10-minute conversation.
Find Efficiencies in Your Work
One guaranteed way to impress a Lean manager: Take six hours to complete work that took your predecessor eight hours, without allowing quality to suffer. If you can find a way to do your own job more efficiently, your manager will wonder what other efficiencies you might find, if empowered to do so.
After completing your assigned work more efficiently than usual, wait for your manager to be available and ask for additional duties. Avoid vague phrasing like, "Is there anything else I can work on?" If possible, suggest a specific task that you know is especially important to your manager.
Autumn is upon us and soon we will be settling into winter for the next six months...at least here in Chicago.
It is also the time when you start planning for the next year, and the best way to do that is by thinking how you can create structure and stability for you team in the following year.
Think small. Even if you are leading a multi-million (or billion) dollar company, you have the opportunity to think small. Consider adding lead management practices to your organization in order to be flexible, nimble, and innovative going into next year.
Find the new opportunities. Your prospects are looking for more value for the money they are spending. Use tools such as Twitter search and Talkwalker Alerts to discover what is being said about your competition in order to find a way in to meet their customers.
Be aware of the risk. Pay attention to what your customers are saying about you, publicly, and be aware they could be looking for other partners. Use tools such as LinkedIn Groups to help customers and prospects with their issues, challenges, and concerns before they are ready to fire you. Open up communication, really listen to their concerns, and make immediate and public changes.
Become more customer aware. You may have the best customer service program in the world. That doesn't mean it can't change. Are you using the social networks to allow customers another way to connect with you? What about the chat feature on your website? Perhaps you have a strong email marketing program or a blog. Use these tools to give customers a voice to reach you.
How do you plan to create structure and stability for your team in the following year?
No business plan should be written in stone. Business conditions are always changing, the marketplace is always in flux—and your lean business plan should reflect these changes.
But lean “doesn’t just mean thin,” says Tim Berry, President of Palo Alto Software, Inc. Berry argues that a lean business plan, like a lean startup, can be executed more efficiently “by continuously measuring progress and feedback.” A lean business plan “requires rapid changes and fact-based decision making.”
Berry offers five guidelines toward a truly effective lean business plan:
“Strategy” means an unerring focus on specific target markets. What strengths or characteristics link your business to preferred customers and the solutions you offer them? Strategy should be outlined in bullet points, with charts and/or images. Why? As Berry says, “Strategy isn’t text—it’s concepts.”
How closely does your current strategy statement describe your specific value proposition? Is the strategy specific enough to facilitate successful implementation?
According to Berry, eight core concepts serve as the foundation for a successful business plan—market, product or services, production, marketing, sales, distribution, management and finance. Old school (or “fat”) business plans offer elaborate descriptions of each key area, whereas a lean business plan summarizes trends and assumptions, “explaining them in detail only where the detail isn’t already understood.” Again, always include more bullet-points than text.
Use lists and tables of numbers to keep your business plan “specific, concrete and measurable.” Pay special attention to milestones—a schedule of activities and accomplishments, each accompanied by dates, budgets, performance metrics, as well as anticipated expenditures for spending and sales.
The best planning also requires continuously updated projections, “just detailed enough to offer good plan-vs.-actual analysis.” Plan for monthly projections at least six months out, but don’t waste time on monthly projections beyond a year. The goal isn’t to see if you can correctly guess what’s going to happen (spoiler alert: You can’t), but to connect the dots (“like expenses to sales”) so you can make adjustments as needed down the road.
Depending on the audience, it might be helpful to “dress up your plan” with market details, technical background, executive team bios, competitive analysis, etc. As Berry notes, “You might need to prove a market to assure investors or to prove financial stability to assure bankers.”
Remember—business planning and strategy is an ongoing process, not a final event. Review and revise your plan on a continual basis.
A lean business plan is a “living, evolving, flexible thing.” To get the best results, you must conscientiously attend to its care and feeding.
How do you keep your business plan lean and efficient?
Lean management is a broadly applicable philosophy that can increase production at all levels of an organization.
Continuous improvement should be your standard for your own work as well as that of employees.
Lean principles not only enhance productivity, but also allow leaders to understand how employees respond to Lean transitions.
At the core of Lean's success is its insistence upon empowering every employee to improve. Empowerment and accountability start on the ground floor, but must not stop there.
Here are three methods of Lean thinking you can apply today to better manage your time.
When you do not "think Lean," you will likely start your day with the work that presents itself first. Instead, make a habit of taking 10 minutes every morning, without distractions, to prioritize your work based on its value to the many "customers" you serve.
What will stakeholders most value from you today? How can you best serve your fellow leaders?
This thought exercise may lead you to discover that you are spending the lion's share of your productivity on tasks that are not valued by key "customers."
Value stream mapping is used to chart a product's journey from raw materials to the end user, with the goal of eliminating waste. You can use roughly the same strategy to more efficiently manage projects that require your participation, but for which you are not solely responsible.
Let us say that your company is preparing a public statement about a product recall in your industry. The "raw materials"--a rough draft--will be sourced from a communications manager. The statement then "flows" up the chain to you for approval, potentially passing through multiple communicators and your legal team along the way. Once you have weighed in, the draft will flow back to your communications team and be delivered by a company leader.
If you spend five minutes sketching a time management value stream map before assigning this type of work, you may find that your original plan would force you to wait for redundant feedback, or would delay the statement's release by delivering it to you for editing at an inconvenient time. By understanding the flow of this "product," you can ensure that it is delivered more efficiently.
Reduction of unnecessary movement is a common Lean management goal, usually targeting shop floor employees. Along similar lines, you may be wasting productive time because your working style causes unnecessary pain, leading to time off and/or frequent breaks during the day.
Consider having your workstation evaluated by an ergonomics expert. Instead of waiting until your level of productivity has been reduced by pain to stretch, schedule short breaks to walk around your office and limber up. If possible, use an adjustable desk to alternate between standing and sitting while you type.
Do you use Lean principles for time management?
Leadership begins with asking the right questions. Your job as a Lean manager is to collect data gathered through observation, study, conversation, and more, analyze it, discover efficiencies, and then convey your vision for improvement to key persons. You can only have an accurate picture of your business's prospects if you ask the right questions.
Here are several questions that Lean aftermarket managers should ask employees. If you do not know the answer to any or all of these questions, spend time today gathering that information.
The employees who operate your equipment and create your products are often closest to efficiencies that could help you improve production. If you do not actively solicit their assistance, you could miss opportunities to improve.
Ask these questions when you visit your shop floor:
Customer Service Representatives are in direct contact with your customers and serve collectively as the face and voice of your brand. Their performance affects your sales, your Net Promoter Score, shrink numbers in retail locations, your reputation, your media presence, and much more. There are few things more important than listening to their feedback and enriching their jobs to reduce stress, increase empowerment, and create powerfully positive customer experience.
Ask them these questions:
Middle management in a Lean organization is uniquely challenging. Supervisors are pressured to continuously improve and meet or exceed goals, yet they may not have the decision-making power to make changes in order to do so.
Listen to your supervisors and help them help you by asking these questions:
Lean management is a potential game changer in every area of your business, including marketing.
A Lean business should apply its core philosophical tenets to the business as a whole, particularly including any area in which significant expenditures are seen.
As a Lean manager, you are obligated to be a good steward of your company's finances, spending your budget in the manner that best serves your customer's needs.
A Lean marketing strategy strips marketing down to what works, often leaving more funds available for continuous improvement in other areas.
Have you ever heard, "It's not really measurable, but it's working?" Statements like this one are common in some areas of marketing, but they are not Lean-compatible. A Lean marketing strategy must be measured by preselected key performance indicators (KPIs), just as you would measure and evaluate any other aspect of Lean business.
Before beginning any marketing campaign, define its KPIs and how frequently the campaign's performance in each KPI area will be reported to you. For instance, a social media campaign might have KPIs including Facebook fans and sales through a custom referral link only used on social media sites.
Marketing is often looked at as a way to prospect for new customers. But your marketing strategy also affects your existing customer base. An effective strategy should both seek new sales and encourage repeat business. Borrow a strategy from Agile software development to evaluate this: Put yourself in the shoes of different customer and potential customer profiles, then articulate their wants in the first person. Here are some examples from the auto aftermarket industry.
Efficiency boils down to eliminating the unnecessary. Look at your KPI data and ask yourself which facets of a coordinated marketing campaign are having the most positive impact on your KPIs. Then, look at the tactics that aren't helping at all.
For example, maybe your social media engagement KPI is up 500%, but 90% of the increase comes from Facebook. If that is the case, you may be better off moving other platforms like Twitter away from marketing and into the customer service department, leaving those outlets as simply a way for customers to reach you if need be. Once that is done, negotiate with any external marketing firms to reduce your marketing bill going forward.
Can Lean management produce the same benefits for nonprofit organizations as for corporations? Opponents of Lean nonprofit management say that Lean works in business because a profit motive exists; in charitable work, there is no such motive. Therefore, Lean is said to be a poor fit which could interfere with organizations' laudable aims.
Arts coordinator Jennifer Tobin might cite another motivating factor driving charitable organizations to get lean: Survival. Her Michigan theater, described as "lean and mean," has thrived despite a recession that left similar organizations reeling.
Jennifer succeeded where others failed, opting to reinvent her theater's pay structure for performers, keep payrolls lean, and trim operating expenses. But can the choices that worked for Tobin save other struggling nonprofits? What about organizations that do not sell tickets, or those operated entirely by volunteers? (more…)
