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Arthur Byrne

Art Byrne: If the CEO sees lean as a business strategy, he/she will involve sales from day one

By Arthur Byrne, Author of "The Lean Turnaround: How Business Leaders Use Lean Principles to Create Value and Transform Their Company" - Last updated: Sunday, November 25, 2012 - Save & Share - Leave a comment

the answer to your question has to go deeper than just trying to explain “why lean has failed to capture the imagination of the sales team”. The issue isn’t so much sales but rather a lack of understanding of lean. If you think of lean as “some manufacturing thing”, and probably 95% of all companies and CEO’s view it this way then this should not be surprising. Heck, lean is most commonly called “lean manufacturing” so even manufacturing companies are confused about what lean really is. Lean is a business strategy. You can think of it as a time based growth strategy in fact because all of the actions you take to remove the waste and improve your value adding also result in significant decreases in the time it takes to do everything. This not only lowers your cost but more importantly allows you to deliver more value quicker and with better quality to your customers than your competitors. This in turn will enable your company to gain market share and grow even in weak economies like the present one. Delivering more value to your customers than your competitors can over long periods of time is the only way to increase value/wealth for all of your stakeholders. This is why you want to start down the lean path in the first place. You should never start a lean journey if your basic objective is just to cut headcount or lower inventory.

Once you understand lean as a strategy then you will know from the beginning that to be successful the entire organization has to participate, including sales, finance, HR etc. In fact to be successful everything must change. You can’t drop lean on a batch organizational structure and think that you will be successful. You are trying to get away from batch and move to flow . You want to be able to compete on your operational excellence but if operations is working hard to remove the waste and level load production then you can’t have the sales force out there trying to bring in big batch orders at the end of the month. If you do you will be working against yourself everyday. In fact getting sales and operations in sync should be something that you work on from the very beginning of you lean journey. Most of the lumpy demand that occurs in any company, and therefore makes it very difficult for manufacturing, is caused by things we do to ourselves not do to wild fluctuations in the market place. For example, if you ship 45-50% of your sales in the last week of the month it usually is due to your own sales terms incentivizing the customers’ behavior. If you are going to become lean this has to change. As a result sales and marketing have to be linked into lean from the very beginning. At Wiremold we made it a point to get our entire sales force on kaizen teams as soon as possible. We changed most of our sales policies to facilitate a level flow of orders. We trained our sales force to help our customers reduce the amount of our inventory that they carried and to never do “loader” programs. Most significantly we changed our sales terms early on to smooth out incoming demand. This was not easy but it resulted in us being able to provide much better customer service with much less inventory. In summary, the issue isn’t sales. The issue is how the CEO views lean. If he/she sees it as a strategy then sales will be involved from day one. If on the other hand if it is viewed as “some manufacturing thing” then sales will never get involved and the company will never become a lean enterprise.

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