I believe that every business or organisation can benefit from Lean Management Techniques and LM Strategies, as it reduces waste, no matter how large or small your business might be. Even a solo-preneur can benefit from implementing the ideas of Lean Management. As the overall goal of Lean Management is to; Improve Quality, Eliminate Waste, Reduce Time and to Reduce Total Costs.
Lean Management addresses the following areas:
– Transport and Motion
– Over processing
Often these areas are also called “TIMWOOD”, to remind the user of each aspect.
The 5 Principles of Lean Organisation Techniques & How You can make use of them for Your Business
Specify what creates value for the customer, by analysing what customers find most valuable about a product or service; your business can use the information when establishing a new concept.
Identify steps along the process chain
Look at each step that needs to be fulfilled before, during and after a product can be sold to a customer or client.
Make processes flow by eliminating waste
Check each step, in order to avoid resources being wasted on unnecessary tasks or items.
Respond to customer demand
By responding directly to customers wants, your business can assure that it does not produce products or offer services that customers do not want to buy.
Strive for perfection by continual improvement
The past four principles are repeated until all areas are addressed accordingly, as being an ongoing process of providing a better service and products to your customers or clients.
The benefits of a lean environment explained – Mandy’s Afro Shop Case Study
Mandy’s Afro Shop is a small chain, which operates between the hours of 9am and 9pm, it offers free parking. The chain sources its fruit and vegetables locally from the local wholesaler, so the supply chain starts locally. All staff are trained to be multi-skilled in a range of different roles, which allows them to being able to operate anywhere within the store, while all staff are paid according to their training and skills. After purchasing customers are asked to pack their shopping away from the checkout. Stocks and the variety of each product are limited, no stocks are held in a warehouse or store room within the premises. There aren’t any promotional displays at the tills, or at the ends of aisles.
The example case study of Mandy’s Afro Shop shows how lean organisation management techniques are used to reduce any form of wasted resources.
As the business is a small chain which operates during the busiest opening ours with it allows customers to shop even before office hours, for example instead of closing after six the chain opens until 9, which is convenient for shoppers who are working.
By sourcing groceries, including fruit and vegetables form local wholesalers, Mandy’s Afro Shop keep transportation times and delivery charges as low as possible.
Having multi-skilled staff helps to reduce wasted time and customer frustration; if for instance a person is only employed to stock shelves, that person could possibly not help out on one of the checkout tills if needed, due to lack of training and knowledge on who to operate the cash register. Paying staff salaries depending on training and skills is not only fair, but also increases the value for customers, as those employees have a greater knowledge and are more able to assist their customers. It might even be a motivation for other members of staff to extend their knowledge and skills.
By limiting stock to three items per product, for example Mandy’s Afro Shop reduces space needed to keep the inventory, as well as avoiding too much cash being tied up. This on the other hand allows for a greater buying power and reduced prices, when comparing this strategy with a competitor who stocks more products or who has a wider variety of products. Another benefit of avoiding high stocks is to eliminate the possibility of pre-packed products going out of date or fresh products getting spoiled or not sold for other reasons and therefore wasted.
Having customers packing their shopping items away from the till, allows more customers being served at a time.
Having no promotional material in the isles or at the tills saves money in form of not spending it on the material itself and on marketing agencies creating them in the first place.
The case study has shown that the techniques used by Mandy’s Afro Shop have reduced the following areas:
– Transport and Motion (local sources groceries, less movement of stock)
– Inventory (low stocks, limited products, no warehouse)
– Waiting (speed increased at tills, multi-trained staff)
– Overproduction (low stocks – no warehouse)
– Over processing (no promotional material)
The first three areas reduce the risk of injury as well as other health and safety issues. They also are beneficial to reduce boredom of staff and lead to higher customer satisfaction rates.
‘Defects’ have not been addressed in the case study, therefore an example could be to double check incoming stocks before signing them of from the wholesaler as ‘ok’. If staff would have to check or even double check each incoming order, defects could be avoided or at least returned to the wholesaler directly. This will then also reduce the amount spend on waste disposal.
I hope this example has made Lean Management more applicable and might have helped you to consider how the principles could apply to your business.
If you have any questions or need some additional advice, please add your comments below.
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All the Best,