OUR THOUGHTS ON:

Lean Business Practices Discussed at Executive Roundtable

Business Advisors

By Richard McKenna

The Schneider Downs Business Advisory Group hosted its third Executive Roundtable discussion on April 8, 2010. Over 20 representatives from local organizations gathered to talk about the benefits and challenges of implementing lean business practices in their organizations.

The discussion, led by shareholder Joel Rosenthal and advisory services manager Rich McKenna, covered a wide range of topics, including process mapping, customer collaboration, six sigma and back-office efficiencies. Although representatives from both for-profit and nonprofit organizations attended, it was clear that lean business practices can be applied in just about any business setting. In fact, several nonprofit participants discussed the need to break down internal “silos” within the organization to facilitate more efficient and effective communication and related work processes.

Another topic that was discussed was the need to determine what the customer sees as “value.” In lean businesses, the customer decides what is value-added, and all the business processes must be focused on creating value. Depending on the type of business, value can mean different things. In some cases, the customer sees price as important, others see quality and finish, and still others see responsiveness and flexibility as valuable. It is important for you to understand what the customer defines as value.

There was a lengthy discussion on the need to fully educate the employees on lean business practices. It is clear that if the employees and even some managers are unclear of the mission, or unsure of the actions to take, then lean business practices will be ineffective.

Rich McKenna mentioned that, in many cases, lean business practices help eliminate the frustration employees feel when things do not go well on the plant floor, or in the back office. Employees get just as frustrated over waste, scrap, lost time and rework as management does.

Many of the participants had completed some form of process mapping, or value stream mapping. In almost every case, the company learned something important about its processes and was able to make a positive change.

Overall, the discussions were very informative and provided various perspectives on how to implement lean business practices. There is no doubt that, regardless of the type of business you are in, lean business practices can be applied.

If you would like more information about lean business practices, or other process improvement ideas, please feel free to contact Joel Rosenthal at 412-697-5387 or email him at jrosenthal@schneiderdowns.com.

Schneider Downs provides accounting, tax, wealth management and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA, and Columbus, OH.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax related matter.

 

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