As the new year approaches we all have to wonder, what will happen with the economy? How will the United States respond with presidential changes and what will become of the unemployment rate? There is a lot to consider as the new year approaches and yet we do have to acknowledge this is not the worst of times. But where does lean and six sigma stand in these changing times?
Before we all start jumping off of the Lean or Six Sigma journey let's consider a few reasons why the lean six sigma organizations are so well equipped to have their biggest years just around the corner.
1. Knowing where you are headed - Most lean six sigma companies started their strategic planning by establishing a clear direction for your company. This is a huge advantage because you know where you want to be and can pivot if necessary to stay on course. Most companies that fail during economic shifts and downturns do not have stable processes in place and rely mostly on sales and marketing or reactive behaviors for their growth. The key advantage of knowing where you want to be or having a "future state" in mind is that you can consider both leading and lagging economic trends and plan accordingly. Lean organizations can be confident in knowing that with lower inventory, waste and strong flexible teams in place their profit margins will certainly be higher in both dowturns of the economy and upward swings.
2. The time to improve - Shifts in economy and "slow" times are even more of a reason to push the improvement journey. It's a well-known fact that the one asset that grows and appreciates with time is people. With that in mind we know that like every other business "shift" in history it will only be a matter of time before economic conditions "change" once more. When that happens the organizations who cross-trained, developed and invested in their people will have an enormous advantage over companies who laid off and let go.
3. Capital? - Stable organizations with less waste need less capital to operate efficiently. Using "times of change" to focus on improving the first three P's referenced in The Toyota Way supports the 4'th P. This type of long term thinking will leave you much better prepared for future changes that undoubtedly will come in time. Additionally, solving problems when you have
4. What gets measured, gets improved - Both Six Sigma and Lean use quantifiable measurements to track results. As times change it is much easier to develop effective, repeatable strategy for the future when you are tracking and gathering measurements already. Consider making this your focus in the new year, establishing metrics that can show the performance of the organization through the ups and downs of the economy. Remember keep the measurements simple. You don't need to gather scientific algorithms that can only be understood after years of study just track the basics: Lead time, Error rate, on time delivery to customer, on time delivery from vendor, Takt time, Improvements, Inventory turnover.
Change is bound to come; good or bad. Now is the time to focus on strengthen your business plan and build excitement around your company’s direction. The organizations who develop their people, relentlessly remove waste from processes and build a long-term mindset will be able to withstand the changes of time and grow stronger and stronger with each new year.