A strong Lean Six Sigma program prepares companies for the upturn in the market! - 08 May 2009

The word recession is on everyone’s minds.  We keep asking “Is it a recession or isn’t it?” Either way, the reality is that the global economy continues to reduce demand on South African exports.  Profit margins are under stress. Companies are slashing capital budgets and retrenching workers.  As budgets become tighter, companies will need to become leaner (not meaner) and more focused. The companies that survive will be the ones who have learned to adapt to the new environment by adopting the principles of lean companies and lean consumption.

Right now all companies are learning how to do more with less, and do it better, faster and cheaper.  If you are not Lean, the time to rethink business is now!  Companies that successfully deploy Lean Six Sigma save on average 2% of revenue per year.

The good news is that economists are expecting a relatively strong South African economic recovery in 2010.  Thanks to a relatively stable banking sector and a lower private debt burden than western economies, South Africa is unlikely to see the same degrees of economic contraction as will be experienced in the US, European Union or Asia.

To take advantage of this impending upturn, your focus as a business leader must be directed toward two main objectives that are central to the Lean Six Sigma Philosophy.

1. Become leaner (do more with less), more focused and efficient.
2. Improve the performance of management and staff through better measurements systems and clearer more focused roles and responsibilities.

If your Lean Six Sigma program has not delivered the results you were expecting now is the time to re-focus, re-energize or re-launch it, but DO NOT cut back on it.  You are responsible for preparing your company for the upturn in the market. Making the wrong decisions now can destabilize your company and make it weaker and unable to take advantage of the opportunities that lie ahead.  If cuts are necessary, then make the right cuts. But be careful not to cut the engine that drives future success.

It may seem counter-intuitive, but quiet times in South Africa’s economy, are the right time to not only maintain but also continue to develop the continuous improvement standards you have set.  Make sure you use this opportunity to reposition your Lean Six Sigma strategy and subsequently your company with sufficiently skilled, well-trained management and staff members prepared for future economic growth.