By Ted Stoa, Consultant/Trainer, The Village Business Institute
Businesses and other organizations can get better, faster and stronger by getting LEAN.
Just what is the LEAN enterprise system? LEAN is a time-tested set of principles designed to add value for an organization’s customer and to eliminate waste, or what the Japanese refer to as “muda.”
LEAN was developed from the concepts of the Toyota Production System. LEAN is actually a total management system and is applicable in any company or organization. LEAN focuses on the elimination of unnecessary activities, inventories, expenses, work spaces and labor, all in order to increase the efficiency and add value for the end user.
The eight areas of waste LEAN identifies are: Defects, Over production, Waiting, Non-utilized talent, Transportation, Inventory, Motion, Extra processing—DOWN TIME.
A true LEAN organization also operates upon the foundational values of continuous improvement and respect for people.
One of the most widely used tools for continuous improvement is a four-step quality model—the plan-do-check-act (PDCA) cycle, also known as Deming Cycle:
- Plan: Identify an opportunity and plan for change.
- Do: Implement the change.
- Check: Use data to analyze the results of the change and determine whether it made a difference.
- Act: If the change was successful, implement it on a wider scale and continuously assess your results. If the change did not work, begin the cycle again.
Many organizations also use the Kaizen method (with PDCA) in order to systematically improve a process. The Kaizen process will be discussed in detail on the blog at a later date.
Respect for people is a concept that includes all stakeholders in an organization, and not just employees. Dr. Bob Emiliani, a highly renowned LEAN trainer and author, said: “It is all stakeholders – employees, suppliers, customers, investors, communities, and competitors – and hence humanity.”
The employee, however, is a very fundamental and important part of “respect for people” in the organization. A brief look at Toyota’s “no layoff policy,” where employees are assigned to other company areas in economic slowdowns, is an example of commitment to the principle. Toyota has also used various slowdowns for additional investment in their people with training and development.
LEAN is truly a sustainable competitive advantage for the organization or company that implements it into its respective operation. It does, however, take a commitment from leadership for the LEAN transformation to be successful. Upper management must be on board with the LEAN concept. The effort will pay off handsomely with the reduction/elimination of waste which leads to higher quality, improved delivery times, greater capacity for additional products/services, and happier customers, which equals increased profitability.
As W. Edwards Deming, the great American management expert, once said, “A bad process will beat a good person every time.”
The Village Business Institute can provide you with the LEAN tools necessary to start and be successful on your LEAN journey.
About the author
Theodore (Ted) Stoa has a bachelor’s degree in Business Management and a Masters of Business Administration degree from the University of Mary. Stoa is a former business owner and KFC franchisee owning and operating multiple restaurant’s in South Dakota for over 25 years. He has also owned a financial services company and recently served as Operations Manager for Steffes Corporation Grand Forks.
With over 30 years of business leadership experience, Stoa provides consulting and training services that include: Business Succession Planning, Leadership Development, Franchise Selection Process, LEAN Process Improvement Training and Creating and maintaining your Organizational Culture.