The Value of Lean

I was at a conference that had a senior executive of General Electric as the keynote speaker. This man was experienced and clearly passionate about manufacturing, and particularly so about the health of the U.S. as a manufacturing country. During his remarks, I was shocked to hear his position on wind and other green energy sources.

He said that we’re approaching energy solutions in this country all wrong. That while wind turbine, solar and hydro-electric solutions are admirable, they’re window dressing. Because, and get this: Because of the worn condition of our nation’s energy grid, every year we lose nearly 50 percent of our overall energy generated between the source and consumption points.

Think about this: No matter how much effort we put into greener, more efficient energy sources we’re still going to lose 50 percent of it because our transformers, grids and stations haven’t been adequately upgraded to keep up with demand. If we improved our efficiency at generating energy by 30 percent—an unbelievable goal—we’d still be 20 percent in the hole. Is that good business?

We’re often guilty of the same oversight in our own companies. We approach efficiency improvements by tackling the low-hanging fruit or the most obvious issues, when eliminating waste may offer the best, quickest and most effective options.

And that brought me to Lean. Surely, you know the story of Lean, and you’ve heard time and again how Lean can help your enterprise—usually from someone with their hands on your wallet.

But Lean—when applied correctly and committed to for the long haul—can eliminate waste that often does more for a bottom line than many other, more obvious investments.

Like the communities and groups I spoke of last month, I urge you to seriously look at adopting Lean in your own company to help it achieve its potential and earning power.

The surest way to determine if Lean is right for any enterprise is to look at its earning potential. Like our energy issues and the economies that surround it—both current and anticipated—our manufacturing base is in a position to seize and regain many valuable manufacturing assets. And our ability to compete globally will be shaped significantly by the companies that realize these benefits.

As I write this, Time magazine has just published a series of articles called “The New Work Order.” One article, titled “Yes, We Still Make Stuff” points out some interesting facts about U.S. manufacturing:

The U.S.—by far—remains the world’s number one manufacturer, despite what you hear or read. According to the UN, since 1990, U.S. manufacturing output has grown $800-billion (that’s more than the entire manufacturing output of Germany). Our ability to deploy technology, create efficiencies, produce high-quality goods and deliver reliably make us the world’s choice of where to have things of real value made. Add to that the unreliable quality and protracted leadtimes from low-cost countries, and U.S. manufacturing is poised to assert itself as a powerhouse. Despite shedding millions of jobs in manufacturing, we still hold this position in the world.

This potential speaks for itself. But it’s meaningless if we don’t explore and eliminate our waste. Like our energy and manufacturing economies, your company can better position itself to compete and thrive. Lean can serve as the catalyst—and the foundation—to carry you into the future of profits and success. But you have to look first.