Small businesses often wonder how they can take their company to the next level. For COOs, it may involve adopting a lean operations model. This strategy involves delivering the highest value to the customer while making the most efficient use of resources. It improves organizational reputation, saves money, and makes you stand out as a leader in your field.

What is Lean Operations?

On the most general level, lean operations require a three-step process:

• Identifying customer value
• Determining the best way to deliver customer value
• Eliminating waste in the delivery process.

Value should be defined as anything the customer is willing to pay money for, whether it be goods or services. Waste is a part of the production process that is not essential when adding value. Companies may determine ways to reduce production time, use fewer resources, and get more done with fewer staff members.

Companies that focus on a lean operations mindset must avoid focusing on small details. They must keep the big picture in mind. Every change should impact their ability to efficiently add value.

How to Implement Lean Operations

1. Review Your Business

The implementation starts with a thorough review of the entire business. Look at every step of your production process and determine where you can deliver more value and reduce waste. Analyze carefully asking yourself, “Does this task improve customer value?” If the answer is no, and the task contributes to waste and serves no other purpose, eliminate it.

Some businesses will bring in a lean consultant to assist with this process.

2. Make Your Team Aware of Changes

Lean management cannot be successfully implemented unless the whole team is brought on board. Teams should understand the benefits of lean management and why the company is changing. Communication ensures a smooth process and reduces anxiety. It will also help employees adapt to the new culture and identify how they can improve their processes to make them more efficient.

3. Eliminating Waste in Production

Leaders typically start by looking at the production process- from customer request to delivery. Can products be delivered in fewer steps? Can you use fewer resources to produce these products? Can processes be completed with fewer employees? When you eliminate employees from the process, they can focus on other tasks optimizing overall productivity.

4. Consider Waste in Your Physical Space

Many leaders focus on eliminating waste in the production process, but they may not realize other business components that contribute to production. For example, they may consider updating their layout so employees can move faster. They may move inventory and supplies closer to the production line so they can be pulled easily eliminating delays.

5. Think About All Aspects of Your Business

COOs must also consider how other aspects of the business impact production. Do long decision-making processes and approvals add to delays? Determine how your administrative processes can contribute to more efficient production. Data and AI may help improve efficiency.

6. Document and Revisit

Once you have determined the most efficient processes for your business, write them down in a document. Distribute them to your teams so they can implement new processes in their daily operations.

As with all business processes, lean management should be continually revisited. Determine if it’s benefiting your company through KPIs and feedback. Decide which systems are working and which can be improved to establish a process that ensures optimal efficiency.

What are the Benefits of Lean Operations?

Companies that implement lean operations should see the following benefits:

• Cost savings: Businesses save money spent on inefficient processes and wasted resources
• Shorter delivery time: More efficient processes means goods are delivered sooner
• Improved product quality: Companies that become more efficient can dedicate more time to training staff and focus on quality
• Better use of inventory and resources: Inventory and resources are put to better use leading to cost savings.
• Improved company reputation: Customer satisfaction increases due to shorter delivery times and higher-quality products
• Better use of physical space: Organizations cut down on inventory, so they have more storage space. Warehouses are less cluttered and safer. Companies can even downsize and save money.

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