Do You Have a Lean Mindset?

In big business, there’s a practice called Lean manufacturing that makes companies more efficient and profitable. And while your business may only employ one person, there are some valuable lessons that a business of any size can learn from this philosophy.

Often referred to as Lean, the goal in very simple terms is to create more value with less work, fewer resources, and less waste. In other words, the goal of Lean is to find efficiencies and eliminate any practices or resources that do not help create value for the customer or client. This management philosophy comes primarily from the Toyota Production System (TPS), which turned one of the world’s smallest automotive manufacturers into one of the largest and most successful ones.

According to the management philosophy, which is based largely on TPS, there are seven primary forms of waste in a production setting. Waste usually comes in the form of:

1. Overproduction (e.g. making more product than you can sell)
2. Delay (e.g. waiting for processing)
3. Transporting (e.g. moving parts or materials from process to process)
4. Overprocessing (e.g. doing more work to a part or product than required)
5. Inventory (e.g. committing money or storage space to unsold goods)
6. Motion (e.g. moving product more than what is required to complete and ship them)
7. Making defective parts (e.g. creating parts or a product that requires rework before it can be sold)

Granted, operating an independent contracting business is a lot different than manufacturing automobiles, but the concept of creating more value, in less time, and with fewer resources should resonate with any small business owner. Particularly with current economic conditions, I would imagine that almost any small business owner would want to save time, eliminate costs, and learn how to run a more efficient business.

To apply Lean thinking to your own business, here are a few questions to ask:

1. Am I spending too much time on projects that don’t create a lot of financial return?
2. In working on my projects, are there any stages in the process where I am waiting for someone else to complete their work? Can the waiting time be eliminated or put to better use?
3. Am I spending more money than I need to on overhead and unnecessary services? If I had to trim three expenses from my existing operation today, what would those be?
4. What projects are taking the most time? Is there any way to speed up parts of the process? Am I taking unnecessary steps to get the job done?
5. Am I having to spend large amounts of time correcting someone else’s work? Is there a way to eliminate some of this work? Or by talking to the client, is there a way to help them produce a better product or cleaner content before it gets to me?
6. Am I having a hard time selling certain services, content, or product? In other words, am I dealing with some kind of real or hidden inventory? What do I need to change about my business model to eliminate the inventory, and how do I get rid of the inventory I currently have?
7. Am I spending too much time on certain aspects of an assignment or project? In other words, am I doing more than the necessary amount of work than the job requires? What can I do to increase my efficiency or to determine when the job is done and good enough?
8. Are there are any steps in my internal processes that are creating inefficiencies? For example, am I maintaining four different e-mail accounts? Am I using outdated software that is creating more work for me or my clients? Would buying a scanner be cheaper over the long haul than driving to Kinko’s every week?

I’m sure that you can come up with many of your own questions. But I find the Lean manufacturing business model and the whole concept of making your business more efficient very appealing.

And even though Lean is a philosophy that is usually tossed around at larger companies, I think that freelancers and independent contractors can benefit from asking themselves the same basic questions. Waste—whether in the form of time or money—can eat away at your bottom line. And sometimes, the biggest culprits are processes and old ways of thinking and doing things that people no longer question. The aspects of your business that are on automatic pilot—the because-I’ve-always-done-it-that-way processes—are probably the areas where you’ll find the greatest amount of waste and the biggest opportunity for creating a more efficient business.

So what about you? Are you running a leaner operation these days? How have you made your business more efficient?

Photo credit: Ivy Dawned (Flickr)