1 Copyright 2017 by Orest J. Fiume - All rights reserved. 1 The Lean Strategy Orest J. Fiume Retired Vice President - Finance The Wiremold Company 2 Wiremold Before and After Lean 1990 2000 Assessed Value $30 Million $770 Million West Hartford: Sales per Employee $90K $240K Gross Profit 38% 51% Throughput Time 4-6 Weeks 2 Hours – 2 Days Product Dev’l Time 2-3 Years 3-6 Months # Suppliers 320 43 Inventory Turns 3.4 18.0 Working Cap % Sales* 21.8% 6.7% * W/C = A/R + Inv – Trade Payables
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The Lean Strategy - Lean Frontiers...The Lean Strategy By Dan Jones, Michael Balle Jacque Chaize, Orest Fiume The Lean Strategy is different in: -Creating Competitive Advantage -Implementing
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Copyright 2017 by Orest J. Fiume - All rights reserved. 1
The Lean Strategy
Orest J. Fiume
Retired Vice President - Finance
The Wiremold Company
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Wiremold Before and After Lean 1990 2000
Assessed Value $30 Million $770 Million
West Hartford:
Sales per Employee $90K $240K
Gross Profit 38% 51%
Throughput Time 4-6 Weeks 2 Hours – 2 Days
Product Dev’l Time 2-3 Years 3-6 Months
# Suppliers 320 43
Inventory Turns 3.4 18.0
Working Cap % Sales* 21.8% 6.7%
* W/C = A/R + Inv – Trade Payables
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LEAN
A Business Strategy
Not
A Manufacturing Tactic
Not
A Cost Reduction Program
What is Strategy? Some Definitions:
A high level plan to achieve one or
more goals under conditions of
uncertainty
Shaping the future by attempting to get to desirable
ends with available means
A system of formulating and implementing a plan to
create competitive advantage
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“If we continue to see Lean
through
traditional management thinking
we will only get traditional
results”
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The Lean Strategy
By Dan Jones, Michael Balle
Jacque Chaize, Orest Fiume
The Lean Strategy is different in:
-Creating Competitive
Advantage
-Implementing the Strategy
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A Simple Example Two Companies in Same Industry Using Same Equipment
Company A
Set Up Takes 1 Hour
Company B
Set Up Takes 1 Minute
• Who Has Lowest Cost?
• Who Can Provide Best Customer Service?
A Small Process Improvement Provides
Enormous Strategic Advantage
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Time-Based Strategy
Lead-Time Reduction
Critical for driving improvement to your customers