Recession? Look to Kaizen!

How to cut cost and save money is at the forefront of every company’s mind today. Over the last couple years what was standard and normal for manufacturing has constantly changed. Every company had to look at how it did business and make drastic changes. One of the main constraints companies are seeing is inconsistent lead times. Companies are seeing their lead times triple or more, in some cases requiring the purchase of more material than ever before. Now to add to the issue, companies are being faced with growing expenses in the form of utilities, shipping, finding new hires, and wages. Adding to the challenge, some customers are reducing their inventory levels which mean smaller order quantities. When faced with these challenges the first thing companies think about is reducing their workforce and I am here to tell you that is not the answer.

Now is the perfect time to double down on continuous improvement, cutting costs, and controlling expenses through Kaizen events. Whether that is looking into your inventory counts and putting a Kanban system in place or going to the Gemba and doing a deep dive into your standard work to drive efficiencies in the process. Now your company finally has time and the manpower to start driving the improvements needed to separate your company from the competition.

To focus on improvements in your company you must first define what these projects will be; a good way to do this is a current state Value Stream Map. By doing this, you will go into each department and see what information is missing, what bottlenecks present, the waste occurring, and other improvements that need to be put into motion. Once you understand this and know what you want your “future state” to look like you can start putting these projects into an action tracker, expand on what the project needs to be, assigning a project lead, giving it a priority, and lastly a timeline. Once you have your projects and objectives, it is time to break your company into teams.

As people say, there is more than one way to achieve a goal and since every company is unique, you will have to decide what works best for your organization. When Toyota modified change implementation in 2008, they split their production floor areas in half and would have every other week intervals with one team working on projects one week and the other working the next. Another example is you can break people into teams by project in department. As an ancillary note, I have also seen some companies create teams with people from different departments; even adding people from the office such as sales and engineering to build comradery throughout the organization. Doing this method not only builds a stronger organization but also gives the team the ability to have different perspectives because each person has a different influence on the product. Depending on what your production schedule looks like you will have to decide what route is the best fit for your company.

Stated prior, every company is unique. What your company is able to do with focusing on Kaizen teams to drive improvements during these times is going to be based off of what realistically you can do. Some CEOs and top management take pay cuts during these periods so they can retain employees to drive the culture of improvement and instill employee security. If that is a road you have to cross, when you get there, that is a decision that you will have to make. A saying that sticks with me is “this to shall pass.” When material lead times and costs lower, people go back to work, and customer orders start to rise. Do you want your company to be a well-oiled machine with trained employees that have the knowledge and discipline to see and drive improvements? Or do you want to still be facing the same issues you have been for years having to hire new employees and train them to make up for the ones you let go?