The Organization That Renews Itself: Lasting Value From Lean Principles

One of the words I most often hear from my clients today is ‘lean.’ The next thing I hear is, “we want to be a lean green money-making machine.” While this quote is quite apropos for the green industry, there is more to learn than just the word and a catchy phrase. Today, building a successful landscape company not only needs to be based on sales and profits, but it also needs to be extremely efficient.

Q. What really is a LEAN COMPANY?

A. Becoming Lean is a systematic effort to eliminate all waste in your business using an array of ideas and techniques that evolved from the quality and process improvement movement of the ’80s and ’90s. While running Lean is a great idea, it is not a new one. Research points ‘lean ideas’ can be traced back to Benjamin Franklin’s “Poor Richard’s Almanac.” You have all heard the expression, “a penny saved is a penny earned.” He also talks about the ills of too much inventory in “The Way to Wealth.” These ideas grew and were refined in the manufacturing arena by Henry Ford, the first to mass-produce automobiles. More recently, the specific tools used in Lean thinking grew out of the Toyota Production System. Therefore, what defines a “Lean Operation?”

The seven definitions of lean management include:

1. Lean is doing more with less. Becoming lean involves the total elimination of waste in every process.
2. Value is defined in specific products and services with specific capabilities offered to customers at specific prices.
3. A Value-added activity is a step or task in a process that increases the sale or function of the product. A step that “adds value” if it takes us closer to creating something that the customer is willing to pay for.
4. A Non-value added activity is a step or task in a process that does NOT increase the market form or function of the product.
5. Value Stream The set of all actions required to bring a product or service from concept to delivery to the customer.
6. Waste is anything that absorbs resources but adds no value.
7. Overproduction, waiting, transporting, inefficient processes, unnecessary motion, defects, and excess Inventory.

“Flow is the progressive achievement of tasks from idea to the customer with no waste.”

The concepts behind lean management are time, cost, and optimization. Time is the single best indicator of waste in the process. It is also a significant indicator of competitiveness. A time-based strategy helps eliminate waste.

To think ‘LEAN,’ you must have a different view of Costs. An example would be in the old model, Cost + Profit = Price. In a lean model, the example would be; Price – Cost = Profit. What is the difference between these two? What happens when you reduce cost in each model?

Optimization of a single process does not necessarily optimize your complete operational system. Your system of service delivery to your customer consists of multiple interdependent steps. Great process flow only occurs when all processes are aligned and fully optimized. Eight out of every ten landscape companies I visit have a waste or unproductive factor of 1/2 hour or greater per employee per day. This adds up to a lot of wasted time and dollars spent on labor that could be attributed to the bottom line.

While there are multiple lean management/process improvement strategies, the key is finding the best approach for your business. In Lean thinking, the Quality Assurance emphasis is on preventing problems and continuous improvement of systems and processes. When processes are re-engineered, prevention of potential problems is key to having a process that flows. Continuous improvement is the idea that Lean is not a project with a beginning and an end; you should always be looking for ways to eliminate waste.

Looking for a good book on the subject, suggested reading;

• The Visionary Leader: How to inspire success from the top down.
• Susan Bagyura (Author), Michael E. Gerber (Foreword), Fiona Dempsey (Illustrator)