A lean organisation

A lean organisation

THE global environment is changing at a faster rate. New companies that have sleek production processes or companies that provide better service are coming on the scene.
An organisation that fails to adapt will soon be relegated to the dump.
Companies are implementing lean management systems. These techniques enable companies to compete effectively on price, quality, delivery and overall customer service.
It is therefore important for organisations to adopt these management techniques.
The lean management philosophy is an approach that supports the concept of continuous improvement, where over a long term an organisation systematically seeks to achieve small, incremental changes in processes in order to improve efficiency and quality.

The main objective of the philosophy is to maximize customer value while minimizing waste.
The whole idea is to aim at creating more value for customers with fewer resources at minimal waste.
A lean organization understands that a customer will pay for value and therefore it focuses its key processes to continuously increase customer value. Customer value has two aspects to it: desired value and perceived value. Desired value refers to what the customer desires in a product or service while perceived value is the benefit that a customer believes she received from a product after a purchase.

Provision of customer value ensures that an organisation has an edge over its competitors. The lean management technique focuses more on optimizing the flow of products and services through the entire value streams that flow horizontally across technologies, assets, and departments to customers.
The goal for all members of an organization that utilizes a lean structure is to constantly find ways to improve the processes of the organization and to make it more efficient.

Any activities that do not add value to the product or service should be removed. The end result is that customers benefit from the changes.
The introduction or adoption of lean management techniques will result in elimination of waste along the entire value streams thus creating processes that need less human effort, less space, less capital, and less time to make products and services.

Companies should be able to respond to changing customer desires with high variety of products, high quality, at low cost, and with very fast throughput times.
The concept of lean is not only applicable to manufacturing processes, although it was started in a manufacturing environment in the Toyota production process.
The lean philosophy applies in every business and in every process. It’s more a way of thinking and acting of an entire organization than a tactic. You will find that businesses in all industries and services, including healthcare and governments, are using lean principles as the way they think and do.
Adopting the lean philosophy requires a complete transformation on how a company conducts business so it’s not a program that you adopt and expect to reap massive benefits in a very short time. It takes a long-term perspective and a lot of perseverance.

Managers that are embarking on lean transformation should think of three fundamental business issues that should guide the transformation of the entire organization, namely, the purpose-what customer problems will the enterprise solve, process-assess each major value stream to make sure each step or activity is valuable, capable, and adequate and lastly people- every important process should have someone who is responsible for continually evaluating that value stream in terms of business purpose and lean process.

A value stream is the sequence of activities required to design, produce and provide a good or service. Members of lean organizations are taught to view the value that their organization produces from the customer’s point of view. They are encouraged to find ways to improve the value enjoyed by their customers.
Lean management does not only deal with manufacturing or service processes but it looks at the organisation structure as well. An organisation structure should be lean so that the management layers are reduced to avoid redundant layers which only help to bring bureaucracy.

There are a number of benefits that accrue from implementing lean management techniques.
Firstly, there is improved productivity as a result of improvements in efficiency. An organisation will be able to produce more goods or provide better service for the same overheads and resources.
Secondly, there is a reduction in waste since this is the main aim of the lean management technique-to prevent and eliminate waste in processes. Waste is anything that does no add value to a product or service. Waste could accrue from transporting materials, build up in inventory, costs related to moving goods from place to place, waiting time for materials required in production, over-processing of goods, overproduction, and defects.

A lean organisation has processes that are able to quickly respond to customer demands. The processes also ensure timeous availability of the product on the market.
Because the concept of lean management embraces the philosophy of ‘just-in-time’ it means there is less stock pile in the form of inventory of finished goods. This helps in reducing the cash tied up in stock. An organisation will therefore have no need to borrow to finance stockholding.
The other benefit is that there will be an improvement in customer service. This is achieved through delivering exactly what the customer wants on time- delivering the right product to the right customer at the right place and at the right time.

This will ensure that you will have satisfied customers that are going to keep on returning to buy from you allowing you to maintain and even grow your business.
Therefore, implementing lean helps the organization to remain competitive both in terms of price and effectiveness of the services offered. It enables the organization to win more business and grow at a rapid pace.

A lean organisation results in higher profits and more business for your organisation.
The global market is changing. You can choose to stay put and hope that no one out there makes better, cheaper products that better meet your customers’ needs.
The reality however is that someone out there is looking at your share of the market and working out how to win it from you. So you better evolve, and revolutionize your industry, if you have to be the first in your industry. Jim Collins said, “Whether you prevail or fail, endure or die, depends more on what you do to yourself than on what the world does to you.”

l Jakarasi is a business and financial strategist and a lecturer in business strategy (ACCA P3), advanced performance management (P5) and entrepreneurship. He is the Managing Consultant of Shekina Consulting (Pty) Ltd and provides advisory and guidance on leadership, strategy and execution, corporate governance, preparation of business plans, tender documents and on how to build and sustain high-performing organisations.

For assistance in implementing some of the concepts discussed in these articles please contact him on the following contacts: sjakarasi@gmail.com, call on +266 58881062 or WhatsApp +266 62110062 .

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