Many SMEs start as family-run enterprises. After business growth up to a certain level, they lose competitiveness, stagnate and subsequently start declining.
SMEs operate with moderate financial investments and have several challenges to face. SMEs have weak business processes. They don’t have strong systems for managing and developing people. As a result, the owners of the business end up overwhelmed and get stuck on the day-to-day crisis.
Our conversations with SMEs: “We are doing twice as much business as we did five years ago, but in terms of the bottom line, we have made more money when we were half the size.”
Lean Manufacturing needs to be implemented by SMEs to solve different problems they face.
As businesses grow in size they grow even faster in complexity. Poor economies of scale result in a faster increase in variable and fixed expenses than sales, and decline in profit margins. Eventually, the business starts making a loss or runs out of the cash it needs to fund growth. It becomes harder for management to diagnose what’s happening in the business and to keep control. Costs rise, efficiency decreases and profits vanish.
SME units in developing countries find it difficult to compete because consistent quality and delivery standards are not being maintained. As competition gets tougher in the global market, customers continue demanding more in terms of pricing, quality, and delivery.
Due to a lack of competitiveness, SMEs have no choice but to shut down or getting acquired. In such critical conditions adopting Lean Manufacturing tools proves to be the right choice to develop the required competitiveness.
While Lean Production’s fundamental focus is on the systematic elimination of non-value-added activity and wastes from the production process, the implementation of lean principles and methods also results in improved environmental performance. Lean produces an operational and cultural environment that is highly conducive to waste minimization.
Lean Manufacturing helps in achieving dramatic results in cost, quality, and time by focusing on process performance.
ADDVALUE LEAN Manufacturing Consultants enable organizations to achieve healthy positive cash flows by increasing inventory turns. Lean Manufacturing experts also ensure intangible benefits such as individual excellence, improved interpersonal relationships, and focused and dedicated teams propel growth to the highest desired levels.
For more details about Lean Manufacturing Training & Consulting Email : info@avci-lean.com or Call / Whatsapp : +91 9824009792
