Executive Briefings

Does Lean Make a Good Company Great?

Simply stated, Lean alone won't make a company successful, but even a successful company could improve immensely if it adopted a number of Lean practices, says Kenneth McGuire, a management consultant with Management Excellence Action Coalition.

For the last 30 years, MEAC has helped companies in manufacturing improve so they can boost productivity. Lean is one of the ways to do that because it is among the competitive norms against which companies will be measured. After all, there's an immediacy in delivery that's required by most customers now, a perfection in product quality that most consumers expect now, and there's a very high service level demanded now. These are goals that Lean practices enable if not necessarily guarantee.

So what's the first step? Start with the people. You must have a "deep and honorable respect for your people," says McGuire. If not, they will drive the whole process - just not where you want it to go.

Leadership is important. McGuire says the process can be so difficult that many companies may get a year or two into their project and then fail because they don't have adequate leadership stature.

What's the relevance of Lean programs in supply chain and logistics? McGuire says Lean "looks" at the value stream from the point of view of the customer. "It says that during the period between the decision to buy and the delivery of any goods, every activity either adds value to that value proposition or it doesn't, and if not, it's waste by definition and should probably be eliminated. Customers for the most part will look at the high cost of their transportation or logistics bill and will say that no longer is labor the difference between competitive and noncompetitive companies, it's the approach to logistics. They favor those who can do it with few stops and delays, the best quality, and the best communications."

McGuire says over the past 10 years or so, the manufacturing companies that seem to be the best have  three times the quality that the average ones possess, they are two to three times faster, they have communications skills that are double those of average competitors, and their people are more engaged.

"So do they deserve the title of greatness?" McGuire asks. "Perhaps not, but they certainly are better."

To view video in its entirety, click here

 

Simply stated, Lean alone won't make a company successful, but even a successful company could improve immensely if it adopted a number of Lean practices, says Kenneth McGuire, a management consultant with Management Excellence Action Coalition.

For the last 30 years, MEAC has helped companies in manufacturing improve so they can boost productivity. Lean is one of the ways to do that because it is among the competitive norms against which companies will be measured. After all, there's an immediacy in delivery that's required by most customers now, a perfection in product quality that most consumers expect now, and there's a very high service level demanded now. These are goals that Lean practices enable if not necessarily guarantee.

So what's the first step? Start with the people. You must have a "deep and honorable respect for your people," says McGuire. If not, they will drive the whole process - just not where you want it to go.

Leadership is important. McGuire says the process can be so difficult that many companies may get a year or two into their project and then fail because they don't have adequate leadership stature.

What's the relevance of Lean programs in supply chain and logistics? McGuire says Lean "looks" at the value stream from the point of view of the customer. "It says that during the period between the decision to buy and the delivery of any goods, every activity either adds value to that value proposition or it doesn't, and if not, it's waste by definition and should probably be eliminated. Customers for the most part will look at the high cost of their transportation or logistics bill and will say that no longer is labor the difference between competitive and noncompetitive companies, it's the approach to logistics. They favor those who can do it with few stops and delays, the best quality, and the best communications."

McGuire says over the past 10 years or so, the manufacturing companies that seem to be the best have  three times the quality that the average ones possess, they are two to three times faster, they have communications skills that are double those of average competitors, and their people are more engaged.

"So do they deserve the title of greatness?" McGuire asks. "Perhaps not, but they certainly are better."

To view video in its entirety, click here