Today whilst chatting with our accountant she raised the 2 minute lean principles which is aimed at improving your business. I have never heard of this before, but apparently after she mentioned some examples they are that obvious I am already doing something similar in my head.
The lean principles are basically ways you manage your business by seeking perfection out of the tasks being done and how they are being done. Fine tuning how a team works is crucial to the final outcome and increasing productivity increases profitability.
My way is very similar by knowing the costs which include the staff I can divide their cost versus the finished product and calculate the cost of the item. If I have a team of 6 who complete 100 punching bags daily I can divide that profit by their wage cost to determine how much that team is worth to the business. If I can create an extra 20% in finished product then their costs do not rise ,but my profitability does.
The accountant was shocked today that I knew in my head what my production team generates daily, weekly and monthly. From this I know where and how to grow those numbers and do not need the 2 second lean principles.
For myself this is business 101 using common sense and knowing your business inside out and do not need to read a book about someone's theory. It was an interesting conversation and she understood what I was saying that the numbers is what counts and they will tell you what and how to improve. Apparently what I do is quite rare amongst her clients as none of them have the same grasp of the business that I have which was good to hear. If you are hands on and the one paying the bills then all of this is common sense and I guess they are not that hands on.
The reality is the only way you know your business is running how it should is by working alongside your employees facing the same challenges they encounter each day. Finding solutions for those challenges is how you improve your productivity and you will not find all of the answers in a book. every business is different and every staff member has strengths and weaknesses including illiteracy in many cases which I encounter daily. In my production line repetition and simplicity is what works and why any tweaking takes time because we are dealing with people who are uneducated. They are not stupid but I would say more limited and why being hands on with them is a must especially when changes happen.
She stopped preaching about here 2 minute lean model quite quickly and was more interested in how I can process the numbers so quickly. The budget meeting was done with no calculators which she had one and stopped using it as I gave her the figures for each item with the amended totals immediately. This is going into round 2 next week once we have the real figures with the increases for rentals and transport costs along with a few other items. These are the unknown which I have already forecast, but cannot be 100% sure how much they are going to rise by. Every supplier will rise especially with fuel costs going up on the 7th which affect everything. Packaging could rise by 15% which could be an extra $2K monthly not forecast correctly.
I have always said know your numbers because otherwise you have no idea where you stand and it is your own fault if you fail. Don't ever rely on others to do the work you can and why delegating tasks when you are not busy should never happen. The business can be a lean business through how you work and it filters down.
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