Running a small company has its challenges and business operations is no exception. Sometimes it can seem like big companies have all the resources, but there are plenty of things that small businesses can do to run as efficiently. Lean business principles are one such solution. But what does being lean really mean and how can it benefit your small business?
Although the lean business model was first pioneered by large global companies like Toyota, that doesn’t mean small companies can’t benefit from the central philosophy to generate the kind of heightened productivity it promises. Adopting lean business principles means prioritizing production that’s sustainable, agile and productive.
So how exactly can you incorporate these principles into practice to drive business efficiency at your small company? We spoke with several experts to find out.
What Is a Lean Business, Anyway?
The “lean” or “agile” manufacturing process was categorized as five principles by Womack and Jones in their book “The Machine That Changed the World.” They are:
- Define Value
- Map the Value Stream
- Create Flow
- Establish Pull
- Pursue Perfection
While being lean may have begun as an exercise in driving large-scale manufacturing business efficiency, it has grown into a standalone philosophy and its popularity is often considered a testament to its success. There’s a reason why business leaders love being lean: It helps drive productivity and performance by the process of simplification.
The premise is easy to understand: By placing what the customer wants at the center of the manufacturing process, you can define value and, in turn, map what’s valuable in the entire process stream. By repeatedly assessing value in the process, you can remove hurdles and trim the fat, keeping things lean.
How Can Companies Apply Lean Business Principles in Practice?
One of the key tenets of being lean is continuous improvement through efficiency, productivity and waste reduction. To do this, simplify and standardize as much as possible to make your business as efficient as possible.
1. Educate Employees About Lean Concepts to Drive Business Efficiency
Omer Usanmaz, the CEO of Qooper Mentoring & Learning Software, has plenty of experience learning how to implement lean strategies for continuous improvement at his software company. First and foremost, Usanmaz says to “educate your employees on lean principles. By making your staff aware of lean concepts, you can help to create a culture of continuous improvement within your organization.”
Usanmaz suggests that small business owners should identify areas where they can improve and then work to make changes in those areas, such as:
- Implementing new processes or technologies
- Making changes to the way that things are currently done
- Be prepared to commit time and resources to the process
Usanmaz also emphasizes that lean concepts can help businesses improve their customer service in addition to increasing their profits, making it a win-win situation.
2. Use the "Just in Time" Process to Prioritize Productivity
Maxime Regardez, the CEO and co-founder of Maki, swears by the lean “Just in Time” (JIT) method to optimize business efficiency. JIT is a strategy used to improve the overall efficiency of a production process by reducing the amount of time and resources wasted on activities that do not directly contribute to the end goal.
“One way that I have applied JIT to my small company is by instituting set times for breaks and lunch, rather than allowing employees to take them whenever they want. This ensures that there is minimal downtime and that everyone is on the same schedule,” Regardez shares.
JIT philosophy can also be applied to inventory management. By keeping only the bare minimum amount of inventory on hand, you can avoid the waste associated with overproduction.
3. Leverage Technology to Reduce Waste
Max Hauer, the CEO of Goflow, knows a thing or two about using tech to improve potentially wasteful processes. Here are the top three ways he recommends achieving this:
- Leverage automation: “Digital assets may be developed — and updated — in a fraction of the time required for traditional software development.”
- Remove IT bottlenecks: “Processes that rely on antiquated, rigid legacy systems put undue strain on your IT staff. To keep things moving at the correct pace, skilled developers squander time on unending maintenance and workarounds.”
- Cut out paperwork: “Digital forms eliminate the need for labor-intensive and error-prone human data entry by capturing and collecting material. Additionally, your users will find it simple to interact with data from third-party applications and current business systems like Salesforce and SharePoint when using digital forms.”
The Lean Potential for Your Small Company
Creating business efficiency using concepts that are easy to apply is in keeping with the spirit of simplification lean principles endorse. By educating your employees about the philosophy, using a Just in Time process and leveraging technology, your small company can reap the benefits. Incfile is here to help with every step along the way. Peruse our business resource center to discover new ways of growing your business.