Don't Let Size be a Lean Barrier

Small manufacturers have advantages when it comes to implementing lean.

The state of lean manufacturing across North
America is largely a matter of anecdotal evidence. And what evidence there is focuses primarily on larger manufacturers -- Toyota, Danaher, Ford and even significantly smaller companies than those behemoths. However, frequently left out of the mix is the small manufacturer, whose annual revenue may top out at $50 million.

The state of lean among these small manufacturers? "My sense is there's a world of opportunity out there," says Rick Bohan, principal, Chagrin River Consulting, acknowledging the lack of hard data.

He suspects not as many small companies are implementing lean as should be or as well as they could be. In some respects, one could point to the literature about lean as a culprit in the lack of implementation. Bohan says it is easy to get an impression from lean literature that lean is a big-company initiative. Small firms likely don't have the resources to have a full-time, separate lean champion or spend three days to train everyone on lean methods, both of which are frequently cited in stories about lean implementations.

Small companies can also point to the reality that everyone already is wearing two or three hats. "They'll say we're already pretty lean," Bohan says. "We make these parts and we send them right out."

Bohan some of that comes from not fully understanding lean, a challenge that besets companies of all sizes. Bohan includes in his definition of lean:

• It is strategic not simply tactical. It results in substantial capabilities that are tough for other companies to emulate.
• It focuses on customer service.
• It always involves a substantial change to the company culture. Improvements don't stick if culture change isn't a part of lean, he says.

The question companies should be asking is "Can we put a better product in the customer's hands exactly when the customer wants it, in the form and format the customer wants it, every time without error or delay," Bohan says. "That's the question that should be driving the lean initiative. Not so much 'Can we reduce the cost of what we're doing now.'"

The consultant points out that small companies actually have some advantages over large companies when it comes to implementating lean, especially with respect to the all-important aspect of culture change. In smaller manufacturers, the CEO's office may be right next to operations. He can -- quite literally -- speak to everyone on a daily basis to discuss the lean implementation and how each individual is feeling or reacting to it. It may also be easier to see when the workforce is beginning to divert from the lean implementation or when everyone's energy is beginning to fade. As a result, a smaller firm can more quickly get back on track.

"Feedback loops are short [in small firms]. That's an advantage to implementing lean," Bohan says.

Also, "My experience has been the results show up more quickly and substantially in small companies."