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The Goals of the Lean Enterprise
Your organization can apply lean methods and techniques to your product-production and business processes to deliver better value to your customers. A lean initiative has four man goals:
Goal #1: Improve quality.
Quality is the ability of your products or services to conform to your customers’ wants and needs (also known as expectations and requirements). Product and service quality is the primary way a company stays competitive in the marketplace.
Goal #2: Eliminate waste.
Waste is any activity that takes up time, resources, or space but does not add value to a product or service. An activity adds value when it transforms or shapes raw material or information to meet your customers’ requirements. Some activities, such as moving materials during product production, are necessary but do not add value. A lean organization’s primary goal is to deliver quality products and services the first time and every time. As a lean enterprise, you accomplish this by eliminating all activities that are waste and then targeting areas that are necessary but do not add value.
Goal #3: Reduce lead time
Lead time is the total time it takes to complete a series of tasks within a process. Some examples are the period between the receipt of a sales order and the time the customer’s payment is received, the time it takes to transform raw materials into finished goods, and the time it takes to introduce new products after they are first designed. By reducing lead time, a lean enterprise can quickly respond to changes in customer demand while improving its return in investment, or Return on Investment (ROI).
Goal # 4: Reduce total costs.
Total costs are the direct and indirect costs associated with production of a product or service. Your company must continually balance its products’ and services’ prices and its operating costs to succeed. When either its prices or its operating costs are too high, your company can lose market share or profits. To reduce its total costs, a lean enterprise must eliminate waste and reduce lead times.
Maclnnes, Richard. The Lean Enterprise Memory Jogger. GOAL/QPC, 2002. Print