For the past two decades, Lean Advisors Inc. adapted and applied Lean to medium and large organizations all over North America. We also pioneered Lean into new sectors such as healthcare, government, educational institutes, and numerous service sector companies. The one area that we neglected, was small business.
It has always been an area that I, personally, wanted to get involved with but was distracted by other priorities.
Small business makes up over 96%+ of all businesses and employs about half of the workforce. It is also the segment that is the driver of employment growth and drives our economy.
This past year we made the decision that we were going to utilize our knowledge and expertise to assist small businesses in adapting the concepts of Lean.
There are some obvious differences between working with small business compared to larger organizations:
- you are dealing with the owner/president
- the results must be immediate – have a crisis now
- they work 6 to 7 days a week – have no time
- their training budgets are minimal – most don’t have a training budget
- many have not heard about Lean
- there are usually no training personnel
- most are running close to break even financially.
When we started out, some of these differences seemed like detriments to successful integration of Lean thinking into their current operation. We discovered the opposite was true. The above attributes and their needs were problematic but in a strange way, it was ideal for supporting a transformation of their businesses. The one attribute, not mentioned above, that trumped all the others, was that these business leaders had true passion and entrepreneurial spirit. They did not have to be pushed or coerced to make changes; they were excited to complete them and wanted help.
We recognized our challenge was to ensure they received the ‘right’ knowledge quickly without disturbing their day to day operations. We had to put together an effective Future State plan that met their demands immediately but was done in the proper sequence, without draining their resources, people and dollars.
To meet these challenges, Lean Advisors teamed up with Ella Vanderburgt, an economic expert with years of experience in small business assessment and financial planning. With her assistance, we developed a program that included:
- initial interviews with owners to attain their current situation and needs
- complete Online Lean training that covered all the major concepts and methodologies of Lean
- presentations by the owners to an executive board to explain their business case and future plans
- on-site assessment of the business to determine the action plan
- on-site and hands-on consulting to implement the necessary tools based of the findings of the Value Stream Mapping of their processes, including 5S, layouts, visual controls and mistake proofing
All the above activities took place within a month or two and was done when it was the least disruptive to the businesses and their operations. Interestingly, every program was adapted to their unique situation – there was no ‘cookie cutter’ solution.
We worked with several dozen businesses of all types including IT, Auto Repair, Retail, Health and Wellness, Cleaning/Maintenance, and Machine Shops. We were totally blown away by the results. Every business that went through the Lean program succeeded. They all improved dramatically in the key areas of measure – quality, service, and cost. They became much more competitive in their sector and are all doing more with what they have and doing it better, faster, and at less cost. In addition, most of the businesses are now hiring more people to meet the increased demand for their services and products.
A sample of the results:
- Reduced an IT shop lead time by over 50%, allowing them to provide the same complete service, at same quality, faster (six weeks instead of 13 – 14). Hired one new employee.
- Designed complete expansion layout and ‘flows’ within an automotive shop, resulting in revenues doubling within the same space. Now taking that same concept and thinking to a larger business expansion, forecasted to again double revenues in next two years and further employ several more area mechanics and apprentices. Owner has hired over $100K of Kingston area contractors and trades people to do fit-up.
- Redesigned a machine shop to create production flows and established a detailed plan for expansion within the next two months; will likely hire two machinist apprentices once complete.
- Initial meetings with a Wellness operation has led to increased production time for products available in their retail outlet and they are now able to expand into wholesale market – before they have even presented to the Selection Committee or received financial assistance.
- Worked with a Clinic to determine space requirements and turned unnecessary space into revenue generation, leasing out over 30% to tenant that complements the existing business (were paying $1000+/mo rent for the space, now receiving $2000/mo revenue/rent). Will add a healthcare specialist in additional available space. Next step is to analyze and reduce ‘waste’ in their processes, so they can do more with less.
- Redesigned a retail outlet and their administration, resulting in sales increase of 50%.
- Others we have been working with include: two entertainment/attraction companies, a limousine service, physiotherapist clinic, kitchen cabinet manufacturer, boxing facility, pre/post natal clinic, carpet/duct cleaning and a virtual reality complex.
Lean and Small Business works
It requires modifications to the standard approach of adapting Lean, but the overall thinking and focus on client value remains steadfast. We are looking forward to expanding our impact to hundreds of small businesses. They truly are the backbone of the economy and all they need is assistance to get the ‘right’ knowledge and know how on to implement that knowledge properly to succeed.