05 Jul How Lean Management Helps Reduce Waste in Your Company
Lean management isn’t an easy task, but if you incorporate it into the workings of your business and use it to cut the excesses from your operations and budget, the effort will pay off. If you ask people in the business field about what lean management is, you will surely get to hear varied descriptions of it.
The simple explanation is that it’s the process of improving management systems continually, looking for what isn’t working right and where the inefficiencies lie. This information can be used to design solutions that will address these inefficiencies. There are a number of things that can be looked upon as excesses in a business:
- While haste only results in waste, working very slowly does the same.
- If you have three people to handle something that one person can easily manage, that is an excess as well.
- The bigger & more successful a business becomes, the more departments it adds and more employees it on-boards, the greater the chances of wasting time and money.
This is where lean management comes in; and if you feel that it’s something your company should adopt and can benefit from, here are some ideas that can help:
#1 Relook at your payroll
It’s not uncommon for small businesses to carry employees that don’t add any value. There are always few people that manage some work every now and then, but these people also end up frustrating the better performers, who tend to pick up their slack. Business owners find it difficult to show underperforming companies the door. But if you feel it’s something you’d be able to manage, do it gently. If letting the person go doesn’t seem a very viable solution, channel their skills into areas where you think they will thrive.
#2 Lean management is all about proper planning
If you plan ahead better, you would waste far less. Companies tend to dive head first into expansions and operational changes, without properly evaluating the potential risks and costs of the project. For example, a company may launch new product lines, without evaluating the market and it’s potential. They may invest in off-the-shelf enterprise-level software systems that have a lower upfront cost, but don’t suit their business needs like a customised one would etc. All of these money leaks can be avoided by planning things well.
#3 Improve your company’s expense-reporting policies
It’s common for employees to ask for business expenses reimbursements, but not all are valid. Your company will have a clear policy in place with reference to these reimbursements. It’s important that you share them regularly and ensure that every employee has easy access to the information.
#4 Improve your forecasting methods in order to improve lean management
It isn’t uncommon for businesses to get their demand & supply forecasting wrong. Predicting incorrectly how much raw materials will be required or how much of a particular service or product will be required, can escalate expenses for your company. Creating a more cohesive and communicative work culture in your organization can go a long way in improving forecasting methods.
In addition, be inquisitive and ask probing questions before simply following methodologies and processes that you see most other companies following. Take the time and make the effort to look around for the areas that your business can be more efficient in.
For effective and sustainable cost reductions & efficiencies that will increase your bottom line, contact the experts at Benchmark Cost Solutions at this number – 1300 170 585. If you prefer, you can also request a call back or write to us at this email address.
Thanks for reading,
Benchmark Cost Solutions Team
1300 170 585