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How can the lean method make your company more agile?

Monday 20/04/2020

The world in which companies are operating today is evolving rapidly and has become extremely unpredictable. The companies that are most agile will win the race. How can the lean methodology help?

  • How can you make all your processes more agile?
  • How can you make agility a reflex that is part of your DNA?

It has long been the case that big companies drove smaller companies out of the market or acquired them. This allowed big companies to become even bigger. Digital technology has upset those relationships. Large multinationals are suddenly facing competition from companies that did not even exist a few years earlier. Because they are faster, more agile and much more responsive to the changing world around them, to new technological possibilities and to changing consumer behaviour.

Agility hasbecomethe key to lasting success. Companies that respond quickly to unexpected circumstances and new developments in their market can distinguish themselves from the competition. This is about crisis situations – of which COVID-19 is an extreme example – but above all it is about everyday threats and opportunities. Agility has to be a reflex. It really has to permeate a company's DNA.

How can you make your business more agile?

A clear strategy is the necessary first step. You can be extremely fast and agile, but you have to move in the right direction of course. Without a clear strategy, companies risk losing focus. Yes, you need to seize new opportunities, but only if those opportunities match your strategy and take you closer to your goals. In order to become (more) agile, you have to develop a strong strategy and you need to ensure that every employee is on board.

If your strategy has been established, you can make processes more agile. Each company has dozens of ongoing processes: purchasing, sales, stock management, production, order processing, planning, distribution, maintenance, marketing, personnel management, ... In many companies, those processes operate independently: each manager is responsible for a particular process and strives towards the best possible results in his or her particular field to meet the key performance indicators (KPIs). However, independently running links lead to a less than optimal chain as a whole.

Stronger processes

The principles of lean (also known as lean manufacturing or lean thinking) come from Japanese industry. Car manufacturer Toyota has introduced and perfected them to improve the efficiency and effectiveness of its organisation.

The lean methodology aims to reducewaste in every link of the chain and in every process. The customer is central to everything. Whether the issue at hand is manhours, machine hours, stocks or energy: any task that does not contribute to the customer's needs and wishes is considered a waste and must be reduced.

A shared philosophy across departments

The common thread for each department – each link in the chain – is therefore: avoid waste and 'useless' work. Lean is more than just a methodology or a way of working. If your company follows the principles consistently, lean also becomes a philosophy that is supported by everyone. It becomes part of people's mindsets: with every task, each employee wonders how it can be done faster, more efficiently, more cheaply and in a better way. This means that your organisation will question its conventional methods. What worked well yesterday will not necessarily be successful tomorrow.

That methodology and philosophy will make your business more agile. Your entire organisation is always alert to achieve shorter turnaround times, better quality products and services, more efficient machines, fewer unnecessary stocks, lower purchase prices, ... Lean continuously improves every process in the chain. These improvements allow you to respond to new evolutions in an agile way.

The lean methodology may have originated at Toyota, but it is perfectly applicable to any company: small companies, large multinationals, new start-ups and established family businesses. Lean also transcends sectors and industries. Manufacturing companies can achieve efficiency gains throughout their entire chain, but other organisations such as accounting firms and marketing companies can just as easily prevent waste.

Manoeuvrability is becoming the new way to go in a rapidly changing world.

Contact one of our experts
Dirk Roelens
Dirk Roelens
Partner Business Consulting