Can the lean philosophy be adapted to small business?

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Can small and medium manufacturing businesses actually make their companies lean?

The idea behind the lean philosophy is that manufacturers can improve the bottom line by reducing costs and waste, by running their operations as efficiently as possible. Toyota is often held as the primary example of how to make a company lean.

But for small and medium size companies, the question of whether or not they can even implement the lean philosophy has been less satisfactorily answered. The concern for smaller companies is that they can’t afford to trim anything because they need to keep growing in order to build a customer base or make ends meet.

According to a dissertation by Anna Rymaszewska at the University of Vaasa in Finland, the key for smaller companies that hope to operate on a lean basis is to think holistically. Whereas large companies like Toyota can, and have, found ways to trim the fat, smaller companies need to think lean from the start.

By taking a holistic approach and figuring out how to apply the lean philosophy to all aspects of their business, small and medium-sized businesses can start, and stay, lean. Toyota became a large company before the lean philosophy developed, and then used it to improve the company. Small manufacturers, particularly startups, don’t have the same opportunities since they need to develop their business in the first place.

“Certain challenging and shared characteristics of SMEs such as short-term orientation, lack of well-established culture of early detection of problems or defects, as well as reluctance to change are studied in more detail in order to raise the awareness of organizations which plan on or are actually implementing lean,” Rymaszewska writes.

It’s also possible to look at this as a boon. New companies, in order to be competitive in the first place, have to think about ways to detect defects early and be ready to change as needed. In doing so, they get to look at successful lean companies and take lessons from them, which in turn means they can further develop those ideas to continue the evolution of the philosophy.