Where are You on the Road to Lasting Lean?

As you progress through the stages of a lean transformation, results will impact not only your operational metrics, but also your financial reports.

A lean transformation is an evolutionary process. A great starting effort is still simply the initial steps on the journey to where you want your corporation to be.

In a recent online seminar, TBM Consulting Group's Ken Koenemann outlined what he calls the three stages of a lasting lean transformation. They are, he says, the natural progression of lean.

Stage 1 is tools driven. Typically it is focused primarily on the manufacturing floor, and the emphasis is on tools, such as 5S, standard work and set-up reduction, for example.

Good results may be occurring, but they are not showing up on financial statements.

"We're seeing good things from an operational metrics perspective, but we're not necessarily seeing it flow through to the P&L or to the balance sheet. And we're just seeing the seeds be planted for culture change," Koenemann says.

Stage 2 is system driven. Lean implementation takes on a broader perspective, moving out of functional silos and toward more collaborative activities. Interactions grow across business processes, "which is where most things tend to fall down," Koenemann notes.

Focus on the customer also grows during this stage, as does interactions with the supply base.

"Now we are actually talking about driving significant improvements in the business that impact the financials, that hit the bottom line," Koenemann says.

Stage 3 is principle driven. "The organization thinks in a lean manner. Everything we do, day in and day out, it's natural," explains Koenemann. "There is an intense focus on your customers and how to create value for them."

There also exists a comprehensive business management system for growth.

"As you go through the different phases, you're going to see impact on revenue, you're going to see impact on net income and you're going to see impact on cash flow," Koenemann says.

To view the entire presentation by Koenemann and Vermeer Corp.'s Jayson Henry, click here, and go to the presentation "Vermeer Corporation: Leveraging Lean for Growth & Connecting Improvements to Business Performance."

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