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Easy Ways Small Businesses Can Be Leaner

In 1996, James Womack and Dan Jones outlined the five principles of a business going “lean” in their ground-breaking book. Lean Thinking: Banish Waste and Create Wealth in your Corporation. In it, the authors explain the five principles of running a lean company:

  1. Identify Value. Value is defined from the standpoint of the customer and only the customer.
  2. Map the Value Stream – Here, you identify all the steps to get from Point A to Point Z and eliminate anything that isn’t creating value.
  3. Create Flow – Next, make the value-creating steps occur in tight sequences so that product flows smoothly and quickly through the stream to get to the customer.
  4. Wait for Pull – Lean businesses strive for operations where nothing is produced before a customer orders it.
  5. Strive for Perfection – Continuous improvement means you are always getting closer and closer to what the customer values.

Lean Thinking is considered by many in modern business as the “Bible” of lean manufacturing. If you want your business to go lean, but you’re a little too busy right now to read the entire book, here are three ideas you can get started on right now.

Look for the low-hanging fruit

Begin with what you know is causing waste in your business that you can tackle and improve quickly. Long waits at your checkout lines, slow website or too-long delivery times, an office space with unused desks, excessive paperwork, underutilized employees—the list goes on.

Here’s a useful visualization tool offered by Planview LeanKit – anything a customer wouldn’t be willing to pay for if they saw it on your itemized invoice is ripe for elimination!

Monitor your highest business expenses

For a manufacturing business, inventory is a prime business expense. Other significant business expenses include rent, employees and insurance as well as costs unique to particular industries, like fleets, wholesale supplies or research and development.

Go after those big areas first. You can purchase inventory management software to better align inventory with demand. Take advantage of seasonal supplier discounts. You might improve your building to qualify for lower insurance premiums or negotiate better leasing agreements. Reduce employee turnover or help employees add more value with skills development and cross-training.

Be smart about where you spend and where you don’t

Apply lean principles when you consider overhead costs. Does every employee need their own office? Should the team be equipped with the latest technical gadget or are the devices you have currently working just fine. Do you have to buy new vans for your fleet or can you find dependable, used vehicles?

Spend on the essential things that do add value like your company’s website or physical front reception space. Don’t scrimp on employee training and motivation programs that will make them more efficient and effective. Fill holes in your business where value is leaking out like inefficient billing or a cramped waiting room.

Contract labor solutions from Goodwill help you focus on what matters

By eliminating wasteful practices, business owners can be more focused on the areas that make the most sense for improvement. Ohio Valley Goodwill helps businesses provide more value to their customers with highly efficient and cost-effective warehousing, fulfillment, packaging and delivery services. Contact us today and discover the many ways we can help you go lean!