A light-and-lean business model yields fat-free resultsPosted on Written by Mary Elston
I wish there was a triple-fudge, double-peanut, rocky-road ice cream with brownie bits that was light and lean, but there isn’t. Getting the “light” version of decadent, double-everything ice cream means saving a few calories, but the fat is still there.
Now turn your thoughts away from food (this might be hard). Instead focus on management and the importance of being lean in how you run your boating or marine business. What are you doing right now to make your company light and lean relative to market readiness, business processes and practices? Where’s the fat hiding? Think truly lean as opposed to throwing out a few obvious time wasters and calling it done. Have you implemented a few productivity measures and feel there’s nothing more to do? Oh, but there is.
As boaters fire up their craft and cruise out onto the nearest lake, river or offshore location, let’s look closely at the steps and processes it took to get them there. We’ll explore how you can use this knowledge to realize a little bump – or a big jump – in cutting costs, infusing efficiency and boosting your bottom line.
What’s the best way to manage a lean mindset for your organization? In a corporate position I previously held, I worked with a team to streamline a multimillion-dollar portfolio of service products. We wanted to make our service offerings lean and focused.
A few of the questions we pondered when starting the project were: What service offerings do we want to keep or eliminate? What criteria will we use? How much time and resources will it take to complete the project? How will our streamlining efforts impact other departments, partners, suppliers, sales and customers? What ongoing benefits do we want to gain when we’re done? This same approach will work well as you prepare to install a light-and-lean management mindset in your company.
As we leap into our lean discussion, let’s categorize the above questions into three areas: effort required, impact involved and benefits gained. This is exactly what the premise of being “lean” is all about, per the Lean Enterprise Institute (www.lean.org): “The core idea is to maximize customer value while minimizing waste. Simply, lean means creating more value for customers with fewer resources.” Now the fun part: how you can apply this to your boating or marine organization.
Effort: The Lean Enterprise Institute says a lean company also understands customer value and focuses key processes to continuously increase it. The goal is to provide perfect value to customers through a perfect value creation process involving zero waste. This clearly shouts why it’s worth the effort to engage a lean approach: you’ll be creating value with zero waste.
When we streamlined the service- offering portfolio I mentioned earlier, we made the effort to review all services in the catalog we were selling and not selling. It quickly became evident that having several hundred service products required major maintenance to keep catalog and website listings current, not to mention ensuring technicians and sales had the necessary materials and knowledge to sell and deliver all available services.
The effort further revealed the majority of revenue was generated by a relatively small percentage of services offered. This enlightenment led to action. Our light-and-lean approach soon produced a lean-and-mean portfolio, and reduced maintenance costs and related needs by double digits, making it easier for the sales department to sell. The effort was totally worthwhile.
Impact: Managing lean-oriented efforts goes hand-in-hand with considering the impact your effort will generate – making your effort meaningful. Apply the above streamlining scenario to your boating business and think impact, too.
Are you starting to salivate over potential savings? How many of your products and services are generating noteworthy revenue? When did you last clean out your product and services cupboard and slim down your offerings to what produces real dollars? Beyond products and services, what other factors feed these such as inventory, materials and processes? When did you last evaluate your lean-and-mean posture relative to materials, procedures and running the business? Has your parts inventory slowly expanded over time, similar to a bulging waistline? (I know, there’s the food thing again.) Did you make room for more parts and products without calculating the ongoing cost of keeping them around?
How about the impact on processes? Process usually resides on the lean forgotten list, but it shouldn’t. How efficiently are sales, service and administration, and manufacturing areas laid out? Are employees taking as few steps as possible to complete work and handle customers in a timely way? Putting a copy machine on the other side of the office from the employees who use it most wastes time with extra steps they take to reach it and return to their workstation. Does it take five different keys to unlock your business doors and four different passwords (instead of a single sign-on) to open essential computer applications?
Over time, time adds up. These factors and many more are why a constant lean mindset is worth the effort; an effort that must include stating the short-term and long-range impact it produces. Also consider the impact on suppliers, partners, employees and customers. Articulate how your lean program changes things; communicate and ensure changes are understood by everyone affected.
Benefits: Potential lean benefits surround you. The online encyclopedia Wikipedia tells us “lean is centered on preserving value with less work.” It further states lean has a recurring theme of increasing efficiency, decreasing waste and using empirical methods to decide what really matters, rather than automatically accepting pre-existing ideas. In other words, use lean efficiency to generate favorable benefits instead of passively accepting the status quo.
To accomplish this, lean thinking moves management focus from optimizing separate technologies, assets and departments to optimizing product and service flows through entire value streams. This thinking must also flow horizontally across technologies, assets and departments to your customers. In essence, it makes the big picture work well and produces interactive benefits.
The Wikipedia entry also advises that eliminating waste along entire value streams – not at isolated points – creates processes needing less human effort, less space and less capital. Eliminating waste likewise means less time to make products and services at far less costs and with fewer defects compared with traditional business methods. This enables companies to respond faster to changing customer desires with high quality, variety and low cost. Information management becomes simpler and more accurate, too. Lean and mean is a cost-busting, money-making machine.
How about you? Are you managing light and lean? The next time a high-calorie dessert provides temptation to indulge, consider lighter alternatives. Do the same thing when you notice an overweight product line or flabby process. Think about the effort, impact and benefit of lean options and consistently apply this to managing your boating and marine business. Start indulging in a lean management mindset. You’ll find it worth the effort – rich with favorable impact and loaded with fabulous benefits.
Mary Elston has spent more than 20 years in management in the transportation, consulting and technology industries. She is a member of the National Speakers Association and author of the book, “Master Your Middle Management Universe, How to Succeed with Moga Moga Management Using 3 Easy Steps.” Contact her at email@example.com.
This article originally appeared in the August 2010 issue.