Finding Profit through Lean

A couple of weeks ago I took several members of my work team to a seminar, which was sponsored by Minnesota Technology, called Finding Profit through Lean Enterprise. Social Media University, Global students may not find this post intuitively relevant, but Lean is about rethinking processes to provide great value to customers at the lowest cost. And social media may be among the tools that can help make that happen.

So please bear with me. I may have another couple of Lean posts, but we’ll be back into the regular SMUG curriculum soon.

Here are the five essential principles of Lean (you’ll also find this history helpful):

  1. Specify the value desired by the customer
  2. Identify the value stream for each product providing that value and challenge all of the wasted steps (generally nine out of ten) currently necessary to provide it
  3. Make the product flow continuously through the remaining, value-added steps
  4. Introduce pull between all steps where continuous flow is possible
  5. Manage toward perfection so that the number of steps and the amount of time and information needed to serve the customer continually falls

One of the interesting commonalities among the three presenters we heard at the seminar was that they all had gone into Lean with serious doubts about whether it could really apply to their business. Likewise, those of us working in communications or public affairs may wonder whether Lean, which is normally considered a manufacturing concept, is applicable for services like PR or corporate communications.

But even though we’re not cranking out widgets, I firmly believe Lean can help us identify steps in our processes that don’t add value for our customers (however we define them), and that by finding new methods and tools (some of which may involve harnessing social media) we can create new value streams.

The morning’s first presentation was from Denny Dotson, President of Dotson Iron Castings, a foundry in Mankato, Minn. Among the lessons his company learned in its Lean journey:

  1. Culture change is everything – you need to become comfortable with being uncomfortable in an uncomfortable environment.
  2. Getting buy-in from the whole team has made the decisions take longer, but the implementation moves much faster.
  3. Give users the tools. For example, they gave shop floor people Photoshop and ability to create their own parts catalogue/user manual. They had it completed within days, and in a way that was most useful to them. Think how much easier it would have been if they had been given a really great tool like an internal blog?
  4. Dotson uses touch-screen kiosks on the shop floor for communicating with employees, and one of the interesting elements is an opportunity for employees to upload personal and family pictures. This is sort of like Facebook without a computer, and it shows the value of enabling employees to get to know each other as whole people instead of just as what they do.
  5. More than half of their shop-floor employees went to visit customers in the last year, so they could see first-hand what the customer needs are. Interestingly, the biggest concerns about this originally came from sales staff, who didn’t want others “interfering” in their client relationships. But the customers loved it.
  6. Continual education is crucial. Dotson will pay half of any continuing education for its employees, up to $1,500 per year. (And if they enroll in SMUG, Dotson can pay 100 percent of the costs!)
  7. When you’re forming a project team to consider Lean improvement projects, don’t staff the team with cost accountants, and ignore the “tool conversion” costs for new technology. (Again, a non-manufacturing business actually has an advantage in making a Lean transition if it can use social media tools, because the costs for those tools often approximate zero.)

Mr. Dotson recommended a book by Dean Spitzer called Transforming Performance Measurement. I recommend another book, The Toyota Way, which was what got me interested in having my work team attend this seminar in the first place. Meanwhile, if you want to read further about Lean but don’t want to wait to get the book, you can start with the Wikipedia article.

I see Lean as a way to free up capacity that is being wasted by inefficiently providing current products and services, so that energy can be released to explore creation of new offerings. And if social media tools can be used creatively to meet business needs, which is one of the major premises behind SMUG, using those tools in conjunction with Lean thinking can be even more powerful.

In my next post (or two) I will share some additional highlights from that Lean seminar. I hope it will help you think creatively about applying lessons from the manufacturing world (and the company that is on the verge of becoming the top automaker in the world, in terms of sales) to improve the way you and your company work.