Lean Enterprises
Submitted by Rick Shaw, EnPower Group


Sharing Knowledge, Growing Value

With today’s economic challenges, increased competition for shrinking markets and foreign currency swings, companies are under amplified pressure to augment productivity, reduce costs and increase sales.
Becoming a Lean Enterprise will help you do that and more.

What is a Lean Enterprise?

So much of what we call management consists in making it difficult for people to work.
Peter Drucker (1909 - 2005)

A Lean Enterprise is defined an organization in which all functions/disciplines are trying to serve their customers by trying to achieve "performance without waste.” (Relentless pursuit of the elimination of waste.) Many organizations apply limited resources to non value producing activities resulting in higher costs, lost sales and lower competitiveness.

In a Lean Enterprise:

  1. No activity should exist unless it adds value.
  2. Value is measured by determining if the activity progresses through the value stream (order to cash) by taking no unnecessary steps.

What is the difference between Lean Manufacturing and a Lean Enterprise?
Lean Manufacturing is focused only on product, service, some operations and perhaps supplier networks.
Lean Enterprise looks at all of the activities below, from the first contact with a prospect to cashing the cheque in payment of goods and/or services provided. As indicated, all of these activities are inter-related and need to be in balance.

What are the Advantages of being a Lean Enterprise?
There are 3 short term advantages of being a Lean Enterprise. They are:

  1. Improved Profitability
  2. Enhanced Cash Flow
  3. Increased Liquidity

These 3 short term advantages should start to become evident within 8 to 16 weeks and should be sustainable forever.

There are 3 medium term advantages of being a Lean Enterprise. They are:

  1. Greater customer satisfaction
  2. Greater employee satisfaction (and employee retention)
  3. More customers & more business from existing customers

These 3 medium term advantages should start to become evident within 16 to 24 weeks and should also be sustainable.

What are the Benefits of being a Lean Enterprise?
Lean is not a cost cutting exercise (not re-engineering). It is a growth opportunity that accumulates the reduced costs and delivers them to the bottom line through the elimination of waste for which the customer does not wish to pay.

  • Customers view Lean Enterprises differently – Easier to deal with, effective prices, consistent quality, etc. and the buy more – increasing market share.
  • Customers view Lean Enterprises as Preferred Suppliers.

Typical results experienced as an enterprise becomes lean are shown in the table below. These results are based on about 400 Lean interventions.

  • Business Process Transaction Cycle Time
  • 50% to 90% reduction
  • Manufacturing/Service Cycle Time
  • 0% to 95% reduction
  • Sales
  • 0% to 70% increase
  • Inventory
  • 40% to 80% reduction
  • Manufacturing/Operations Floor Space/Office Area
  • 30% to 60% reduction
  • Productivity
  • 25% to 60% improvement
  • New Product/Service Development Lead Time
  • 0% to 50% improvement
  • Operating Costs
  • 15% to 25% reduction

How do you become a Lean Enterprise?
A company becomes Lean by identifying and eliminating Wasteful activities in the Enterprise. The most common elements of waste are cited below.

Effective Lean Enterprises harvest the Value of the Human intellect (ideas, suggestions, and better ways) of their entire workforce. They create a culture, structure and process to identify and eliminate waste.

How do I know if our company can benefit from being a Lean Enterprise?
Over the course of a 1.0 to 1.25 hour meeting, we will be able to give most organizations the answer to the question as well as to put some scope around the $Value of the benefit.

We do this on a NO COST/NO OBLIGATION basis. Contact information for EnPower Group is provided below. We look forward to assisting your organization to maximize their potential as a Lean Enterprise.

 By Rick Shaw
EnPower Group Inc.
 To Contact Rick Shaw
 rshaw@enpowergroup.com or (416) 804-5078

Visit us directly at EnPower Group Inc. http://www.enpowergroup.com
Other key contacts:
 Doug Cranston           dcranston@enpowergroup.com     (416) 949-4850
 David Rosengarten     davidr@enpowergroup.com           (416) 788-2774


Sharing Knowledge, Growing Value