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 Lean and Technology – Powerful Combination

We are almost a quarter of the way through the 21st century and those of us who were around 50 years ago couldn’t have imagined the speed at which technology and change would happen.

In fact, most of us have no way of knowing what amazing breakthroughs are just around the corner. Innovation is moving at light speed. In fact, I was having a conversation with an executive with a large Defense Contracting company about new product development and the future, and he stated, “that if you can imagine a future product, we have already invented it”. Now, that can be scary, or it can be exciting. For business, it is exciting.

Technology touches all aspects of our lives, and we rely on it to assist us in our personal lives and our business lives. We can’t function without it, and most of us get excited about the next new ‘thing’.

Businesses and organizations are no different. They are constantly bombarded by new IT, and new faster equipment. Their desire is to access information that allows them to build products faster or service clients faster, with higher quality. It also allows them to make more accurate day-to-day decisions as well as can assist in making strategic decisions. The goal is the technology, or equipment, will allow them to service their clients better while making them more competitive (reducing cost).

Investing in technology or new equipment represents an exciting opportunity for every business. It allows them to determine whether such investment will propel them towards new heights of efficiency, success, and growth. However, before delving into acquiring new technologies, it’s crucial for leadership to grasp the positive impact this investment will have on their bottom line, as well as its potential to support and enhance the entire process.

If the aim of the investment is to overcome a bottleneck in the current process, it’s wise to first consider whether this technology is being integrated into an efficient end-to-end process – one that could be optimized to increase productivity and capacity, leveraging existing resources. Let’s remember the saying: “Don’t simply pave the cow path.” In other words, investing in technology offers an exciting opportunity to catalyze progress and pave the way to success.

Integrating technology into a process laden with inefficiencies poses challenges in crafting a precise business case for the new technology/equipment. The presence of “inefficiencies” within the system makes it arduous to grasp the true necessities and the extent required to elevate one towards the next level of service and profitability. Moreover, in many instances, this further embeds these inefficiencies within the system.

An illustrative example pertains to companies exploring the installation and implementation of ERP systems to bolster their ability to cut costs and meet customer demands/expectations. While this technology may seem like an obvious choice and appears logical on the surface, to expedite the return on investment (ROI) of the technology, it’s imperative to establish robust success factors. Among these, it is recommended to designate a “technology champion” tasked with implementation and support, thereby infusing a positive and proactive perspective into the entire process.

Investment today that you will likely have for decades requires a thorough understanding of your future needs and your existing internal processes. Without this knowledge of what is broken currently in your processes, you run the obvious risk of moving the ‘waste’ to your ERP system or technology and basically ‘paving the cow path’ – solidifying the ‘waste’.

To increase your chances of success when integrating technology or equipment, we strongly urge you, and your team, to do a proper analysis using Lean methodologies, especially the Value Stream Mapping (VSM) tool. VSM will allow your organization to accurately ‘see’ your current processes and identifies the ‘waste’ in the system. Then you have the choice to either make the immediate improvements to your processes, or in the very least, know what and where the ‘waste’ is in your processes, and the root causes of the waste.

With this knowledge of the new improved processes, you can make more precise decisions on the technology required to support your improved processes rather than attempting to camouflage the broken processes with technology. Completing the VSM exercise will remove much of the risk of investing in equipment and technology and allow you to move forward with the confidence that you will maximize the ROI and meet your expectations.

You want your investment to be just that ‘an investment’ which supports you in taking your business to the next level of service, cost improvement and quality – competitiveness.

Technology is Important!

Take the Time to Do It Right!

By Larry Cote, Managing Director, Lean Advisors, Inc.