Question: “Aren’t continuous improvement programs, like Lean methods, something you do in the factory? We don’t make anything, so what do we work on; everything we do is an intangible or just paperwork and documents.”
Answer: “This is a widespread, nearly universal myth. The primary reason that the Toyotas of the world are beating their competitors is only partly due to their lower cost, higher quality products. GE made the concept of “process excellence” a management buzzword by applying the lean-thinking and process variation control (“6 Sigma”) concepts to every, and I mean every aspect of their business. These lead to shortened, more effective, more efficient design processes, better ways to handle route, but essential things like vendor invoices and payments, and how top management teams handle their own processes. If you can understand a process well enough to document it, you can improve it.
Simple example: A leading memory chip supplier achieved serious, high levels of commitment from their suppliers by paying for deliveries the next day, and without an invoice. As soon as the incoming shipment is confirmed as received, their internal process queues up a check for the material using the PO pricing, with no invoice being required. The check is printed and sent the next day, or an e-transfer processed.
Saved – all of the work required to handle vendor invoices (on both ends of the transaction), payment approvals, the matching process, etc. Benefit? Cash flow is the one thing that a vendor typically will appreciate the most, and if supported, you will have his highest possible priority and attention. There is competition among customers for product and delivery terms in many industries, certainly in computer memories.”
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