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by Lauren Gibbons Paul, Contributing Editor Posted on Thursday, June 28, 2007 11:06:45 AM   | Abstract: | It's common to mistake lean and Six Sigma for mere cost-cutting tools. In reality, lean is your company's best hope for a sweeter bottom line. |
Pop quiz: What's the first thing that comes to mind when you think of lean? If you're like most people, the likely phrase is "cost cutting." That's partly because lean and its quality-obsessed counterpart, Six Sigma, have helped many organizations, especially manufacturers, trim the fat from processes and reduce scrap and rework. Lower costs are the natural result. But don't make the mistake of viewing lean-Sigma as something to be invoked only when cost cutting takes center stage. Far from it. Done properly, lean-Sigma can — and should — serve as the engine to drive growth in your organization. "It is a misconception that lean is a program to reduce cost," says Terence T. Burton, president of the Center for Excellence in Operations Inc., a consulting firm. "It is true you can use lean to reduce costs, but there is a tremendous growth opportunity as well." At the simplest level, cutting costs by "leaning out" your processes frees up cash that you can then use for growth — for example, investing in another company or exploring a hot new product or a promising business model. Lean can also be used to improve customer satisfaction. If your response times are short and your cost structure is low, you will be able to turn more quickly to satisfy a changing customer requirement or come closer to achieving make-to-order or even engineer-to-order. Delighting customers and earning their loyalty with service that can't be obtained overseas is a sure path to organic growth. [Click to continue] |