How to use lean manufacturing to make your business more productive

via BDC

Follow these three steps to drive long-term success by eliminating waste in your business

It’s a common problem; your business is bringing in plenty of cash and revenues are growing, but you are struggling to make a decent profit. Why? And what steps can you take to turn things around?

One probable answer is to tackle the “waste” and inefficiency that is lurking in your business and acting as a brake on your ability to generate profits. A leaner operation can lower costs, increase output, help eliminate quality problems, reduce space requirements and cut time to market. It can also improve employee morale. And almost any business can benefit—whether in manufacturing or services.

“While there are specific types and definitions of waste in the world of operational efficiency, a simpler way to think of waste is any operational element that is a source of frustration in your business,” says BDC Senior Business Advisor Lucie Le François. “Lean management is a system based on the idea that providing value as perceived by the customer, customer satisfaction and customer experience drive long-term success.”

Here are three easy steps Le François offers to entrepreneurs who want to start building lean into their business.

1. Start with an assessment

The first step in any efficiency drive is to take stock of the situation. You can begin by talking with senior managers and key employees to identify problems that keep cropping up and opportunities to become more efficient.

You’ll also want to consider what information you are collecting about your operations. Accurate financial and operational data will allow you to benchmark your business against your peers.

You can use the data you collect in this first phase to better target your future efficiency initiatives, adjust your product mix and pricing if needed, and identify efficiency problems in individual product lines. The data you collect at this point will also serve as a benchmark against which you can measure your progress.

2. Take action

Once you’ve evaluated your company’s productivity levels, you’ll be ready to take action. Three fundamental efficiency projects that are useful for most companies are: