Jan. 29, 2020

LEAN investments

I have always wondered why LEAN principles are associated with operational processes only. LEAN manufacturing is probably one of the most famous phrases in the industrial world. However, nobody (out of operations) is trying to use the advantages.

So, is there any application to different company activities? Based on my experience I would say yes - it could bring a lot of benefits.  Let us take a look at Kai Zen philosophy “continuous, small ongoing positive changes which reaps in major improvements. What will be the result if we apply it to the company investments plan? 

In the investor's language, this will sound as: prioritize the small, focused investments to improve the current system. The benefits of such an approach will be:

- The management will need to examine the whole system and activities in details.

- Will improve inter-level communication

- Will reduce the size of the investments and the risk.

- Such an approach directly works for increasing efficiency.

Looking at the abovesaid a logical question pops up - why aren't we solely focusing on this approach? That is because of some limitations. The major one is speed. The method and the results are sustainable but need some time for major change. Some situations require development beyond the possibilities of focused investments as well.

Despite the limitations, I strongly recommend to make sure that you have exhausted all options for focused investment before deciding on a new one.

In the next article, I will try to extrapolate the 5S method to the administration activities.