Lean business practices create a weighty issue.

May 6th, 2014

The issue is what is so different today than yesterday and why do we even need this term in the procurement space?

Todays post is from Ronald D. Southard, CEO of SafeSourcing Inc.

This author tires of the desire of businesses that are trying to reinvent themselves and in so doing constantly coming up with new buzz words, industry terms and business jargon in order to try and prove that they are thinking differently and as such should be trusted to be on the right path. Maybe their original business plan was just flawed and they are not deserving of our trust.

Lean in any functional area of a business simply means producing more or getting more done with fewer resources. I’m not sure this is a great message for companies that are just launching, trying to grow or improve. If you’ve been around for while, and your customer reads between the lines properly, this may just mean that you did not plan your launch properly or react properly to market indicators in the past.

We all know that lean practices were originally a move to reduce costs in the manufacturing process and since it worked for manufacturing where we are typically talking about thousands if not millions of pieces and parts, other companies began to think why not for our business. As such let’s apply the term lean to the supply chain or the procurement space. Any one that knows the procurement space already understands the lack of resources.

The goal of every business should be to provide the end user or customer with what they want or what you have promised them at a fair price. If you do so, that customer and others that hear about that customers experience should buy more. When this happens, if the business plans appropriately they should grow and grow profitably. And this should create new and sustainable jobs. So, how is this any different than the way businesses were run 50 years go or even 100 years ago? The truth is that it’s not.

The decision to not hire, to try and do more with less and to reposition resources rather than firing someone is a better way to run a business. Unfortunately they do not teach this in business school. This author has been through many mergers, acquisitions, downsizings and the like over a lengthy career. One thing you can always count on in these scenarios is let’s cut expenses. You can call it lean, but it’s not.

So, let’s not hide behind the term lean or other business jargon or buzz words.

If you’d like to learn more about how SafeSourcing can help you reduce costs without reducing headcount, please contact a SafsSourcing Customer Services Account Manager.

We look forward to and appreciate your comments.

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