Creating A Lean, Agile Enterprise 

Customers are continually demanding exceptional quality as well as higher levels of commitment to service. Complicating these customer demands are material cost fluctuations, volatile commodities and the need for rapid product/service adaption. These issues are making it more challenging every day for companies to maintain or improve their competitive advantage.

Do More with Less

In order to improve competitiveness and profitability, firms are forced to do more with less. Innovative firms are finding ways to reduce costs and provide higher quality products/services with shorter lead times. While these accomplishments may seem in conflict, they are absolutely achievable through the governing principles and practices of a Lean Enterprise:

• Improved quality – through a Lean Enterprise, all possible processes are standardized and employees have a better understanding of how to fix issues resulting in less defects and a higher-quality product or service
• Reduced cycle time – by eliminating waste throughout the value stream, processes work as a single-piece, continuous flow of products or services to the customer
• Reduced costs – the minimalistic nature of Lean provides immediate and long-term cost savings due to the use of fewer materials, parts, workers’ time, inventory and space

What is a Lean Enterprise?

A Lean Enterprise is an organization that walks the fine line between efficiency and effectiveness. The Lean Enterprise delivers maximum value to the customer while minimizing material, time, human capital and space. Ultimately, it is the elimination of all waste through the entire process of providing a product/service that drives this balance of efficiency and effectiveness. Less waste reduces costs while also minimizing operational inefficiencies that restrict employees’ opportunity to meet or exceed customer expectations.

Too often, Lean practices are mistaken for manufacturing shop floor initiatives without the realization that a true Lean Enterprise needs to become a company-wide initiative – engrained in all stages of the value chain. All business functions such as finance, manufacturing, accounting, logistics, marketing and sales touch the value chain in all stages of the product lifecycle. To truly meet the increasing demands of customers, companies’ responses need to be holistic – implanting Lean throughout the entire enterprise including all stakeholders such as suppliers.

Lean for the Customer

The key to becoming a Lean Enterprise is the integration of the customer into the value chain. Processes should be structured to flexibly and accurately match customer demand. As customer needs and demands change, so must the organization adapt to meet or exceed those demands. While each company is unique, there are certain characteristics that all Lean Enterprises share:

• Empowered employees motivated to improve
• Strategic relationships with customers and suppliers
• Responsiveness to customer demand and changes
• High profits, low costs

Lean is an age-old subject that is often interpreted in many ways. CGN views Lean as a way to stay agile to consistently meet and exceed customer demand. Stay tuned for the next Lean segment “What does it take to become a Lean Enterprise?” We want to hear your thoughts on Lean Enterprise transformation, so post your comments below!

- by Ron Sutter, Managing Principal
- by Rick Nieves, Senior Manager - Supply Chain