Is your organization too Fat - Try the lean pill

Most of the organizations are too fat to withstand the time of recession. They had plenty of food earlier in the form of large orders and predictable and stable demand. But it is no more. Now organizations are starving for orders. Naturally it might be the best time to swallow the lean pill. It will make you “lean” and will make it possible to withstand the testing times of recession. In a normal time your organization might not want to swallow this bitter pill even most of the people used it talks about it positively.

One of the factors stopping organizations from turning to lean manufacturing is the change it will bring to the organizational thinking. Traditional organizations are built with large hierarchies (which I call fat structures). They operate smoothly by having larger warehouses and large amount of safety stocks. Lean which encourages totally the opposite, naturally will have to go through huge amount of resistance and most of the times will never be materialized even when there are proven examples all over the globe.

But this economic crisis provides less food for these over weighed organizations hence they have to loose fat whether they like it or not. You can not have huge hierarchies. Organizations will not be able to have large amount of money to be tied down in the form of inventory. They will not be able to predict the demand for the years to come and be prepared since the demand will change quicker. So they will have to produce only for the orders they have in their hands not for the predicted demand. Importantly, competition will get tougher since most of the traditional competitors will be ready to slash their operational costs and reduce margins just to keep the business rolling. You have to do much better operationally with a fraction of cost for your organization to just be in the game.

If the above sounds familiar and if you feel this is your organization, then I am sure you will not be feeling comfortable with the situation. But I have good news for you. All what you want to achieve, higher manufacturing flexibility, lower levels of inventory, quick response to the changes in the market and higher quality for lower costs are among the benefits lean manufacturing techniques have to offer. There are good amount of examples for the organizations who have achieved these goals by practicing lean in their organizations. But there are some failed too.

Was something stopping you from practicing lean in your organization up to this point? It might be the fear for change, fear of not getting it right or resistance from the others. Now recession has made your choice simpler. Either you become lean or you are out of the business. So what would you choose?

Although I can not guarantee your particular implementation of lean is going to succeed (Although I believe if it is done correct, should not be the case) it is better to give a try since you have no other choice, isn’t it?