Accelerate lean, Six Sigma during economic uncertainty

Lean training for Lean Enterprise Transformation executive seminars by management consulting firm R. Michael Donovan & Company Inc. attendees are asked to list questions and concerns they want addressed during the seminars. One executive asked: "With a recession and lower revenues likely, how should we continue our Lean Six Sigma transformation?"

"The last good choice during challenging economic times is to pull back on Lean Sigma efforts," says management consultant R. Michael Donovan. In fact, when economic uncertainty is at its worst is when the aggressive pursuit of Lean Sigma can produce high returns by aggressively eliminating waste through perfecting business and production processes. Efforts should be self-funding, improving the company's overall business performance, which is much better than the typical "cut back to survival" mode. Generating higher cash flow is of paramount importance when revenue is threatened.

Overall, the lean consultants at R. Michael Donovan & Co. agree that manufacturers should expect effective Lean Sigma efforts to produce results like:

·        Cost-to-produce down 20 percent or more

·        Inventory down 50 to 80 percent

·        Lead times reduced 60 to 90 percent or more

·        Cost of quality down 50 to 70 percent

·        99 percent customer service

·        Throughput increased by 10 percent

·        Revenue and earnings growth at least twice your competition

Jack Rink, a lean consultant and lean training specialist, says, "A company rapidly on its way to becoming a Lean Enterprise is in a much better position to counter the effects of an economic downturn because a Lean Enterprise is flexible, fast and predictable. In addition, the Lean Enterprise has a significant cost advantage and less capital invested than competitors."

Donovan and Rink both emphasized that written project charters should provide for positive returns in 90 days or less with measurable results that link directly to the company's business performance. By doing this you keep leadership immersed in the "game."