As a company who has been doing manufacturing ERP implementations and has been evangelizing lean manufacturing principles for a long time, we believe in lean principles, and believe they can be applied to industries outside of manufacturing.
People ask us, “Is there ever a time when lean manufacturing is not worth the effort?” The answer is yes.
1. When you just want to cut costs. Yes, lean is about eliminating waste, but the primary directive of lean is to increase the value to the customer. Lean is more about increasing the top line (increasing sales) than decreasing the bottom line (cutting cost). If you use lean as a headcount reduction tool, you may lose loyal, valuable employees in the process. If you instead assign those employees more meaningful work, you can bet customers will pay you more. You will either have more capacity to produce more of the same product at the lowered cost basis – or you will be able to increase your prices due to the added value.
2. When you don’t have executive buy-in. Lean manufacturing is more than a process, it is a philosophy, a way of operating a business. Lean is about adding customer value through every touchpoint across all business processes and departments. If only one department is embracing lean and cannot get leadership on board, the results will be minimal. For example, if you build more value into every product, but accounting and sales don’t increase the price, your effort has been wasted.
3. When every job is a custom job, with dynamic changes. Lean depends on having a stable business process that can be improved over time. If every job is different, and it changes as you get into the project, you’re not ready or right for lean. Start by focusing on process improvements and creating standardization.