In the manufacturing world lean systems thinking has abounded for many a year and yet still there are many companies who have failed to adopt this philosophy.
For those not familiar with this term it refers to the mindset that by scrutinising the individual processes that collectively make the business function one can increase productivity and decrease cost by eliminating unnecessary time and material inputs.
Consider this- picture the robotic arm of a welder that whirls and performs acrobatics, it is actually losing production time for the duration that the arm is in the air performing the acrobatic. I know that we can say that it is re-aligning itself but if the quickest point is from A-B then why not re-design the materials or process accordingly? The acrobatic is effectively a solution to a problem; one needs to focus on the problem.
Does this philosophy have a place within our service sector organisations? – Very firmly so. Last month I commented how a packaging company in Glasgow had significantly increased its trading profits in a highly competitive market – how? – Exactly by adopting this philosophy in its supply chain.
Look at this example of a Credit Control Procedure – does it mirror yours?
As you sit at your desk today and I am talking about you, not your staff, ask yourself which activity contributes and which erodes value to your business? Two examples my money would be on would be e-mail and the second, the genuine, time focussed, business development activities representing a very low value. There are a multitude of others, jot a few down as you go through your day.
This is the arena that I work within, starting with Strategy, Organisation fit and ultimately looking at the supporting IT infrastructure. There is a lot of hidden cost and significant operational efficiencies to be gained by looking further into lean systems –reach for your calculator – “How much is 0.5% points on your gross margin worth? And the same again in overhead?”
Woe-betide you if you cannot answer that question.
Call if you’d like to discuss this further or browse through our website- as always, very happy to help.
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