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In the backdrop of margin squeeze, FM Industry has to embrace LEAN with an emphasis on cultural and data tweaks



Talking lean or making selective lean measures is only good enough if the organizational leadership embraces the holistic principles of LEAN management by building a lean culture.

In companies that traditionally come from the low-profit margin sector or all those struggling due to adverse market conditions, like the current context of Facilities Management, going lean is not an option but a necessity. However, I admit, it is not always easy and often challenging to implement as this needs a cultural renaissance.

It requires the involvement of every stakeholder in the mainstream organization, especially the mainstream employees, as it touches upon change management that often impacts specific employee-sensitive touch points as the organizational cultural aspects.

Though it may sound tricky, it is doable, provided we take specific concrete measures equipped with practical strategies, direct action and result oriented, where people can experience its benefits. Lean and agility are integral to a company’s value system.

In my case, how did I discover lean? I had to go lean, not due to management discourse or consulting advice, but the rugged market conditions with business turbulence.

I had to implement the tenets of LEAN. The profit margins were turning southward, and we had fewer options to fend off the prevalent hostile market conditions. Though our adoption of going lean at that moment was the need of the hour, in due course, adopting lean management turned out to be a big success, eventually becoming our perpetual strength.

In the later years, we were able to reap its benefits as our industry remained under extreme pressure of lower margins where keeping lower overheads was the evolving need.

Based on my experience in adopting a lean culture and engraving this in the company mainstream, here are some thoughts and steps to consider:

1. Champion the Lean Culture:

Business Leadership should champion this lean thinking by making it a core value, not an interim measure to cut costs. They should communicate practical ways to convey the benefits of being lean and ensure every employee is aware of the benefits it brings to the people within the leadership pier and the windfall benefits these will derive from adopting a lean approach.

Above all, leadership must demonstrate its ownership to lead by example. A sensitive issue that leadership must ensure is implementing this from top to down, not just specific symbolic actions. Lean must not be misconstrued as a cost-cutting measure but as a cost-rationalizing approach to derive benefits for all.

2. Emphasize Continuous Improvement:

Encourage continuous improvement in every aspect of the organization by constantly analyzing and reassessing processes, finding ways to innovate and optimize through change management, and revisiting every strategy where there is room for improvements that invoke savings.

3. Focus on Efficiency:

In a low-profit margin market, it is usually the first go-to measure. It is essential to optimize available resources to achieve efficiency, especially in the service industry, including FM, where workforce dynamics rules are often complex.

Workforce Productivity thrives on the simplicity of processes, and without impacting quality, there is always room for better supervision, blended learning to ensure on-the-job training and adequate time and attendance systems.

Adopting lean processes such as just-in-time inventory logistics management, value stream mapping, and agile project management through centralized shared services are all poor interventions. In the past decade at EFS, our lean management strategies proved to be a big bonanza in the last three cycles of recessionary market conditions, including Covid-19.

Through these measures, we could add two to three per cent to our net margins. However, this must not be a sporadic intervention or cyclical but a continuous process by adopting a lean culture where opulence or wastage is a sin but lean and agility are embedded values.

4. Involve Employees:

Lean culture involves every member of the organization. Engage employees in the process by establishing a culture of LEAN, encouraging them to identify problems, share ideas, and implement solutions. Once again, powerful communication management is a must to enlist employee participation, and that is most critical.

Be it self-serving for tea and coffee or the use of stationary or DIY culture to walk the extra mile, all that matters. Their engagement is critical in a business where a large part of the workforce is on the front line.

These can contribute immensely, provided there is an outreach for them to come forward with their participation.

5. Standardize Processes:

Standardization ensures quality results, reduces waste, and minimizes variations. Establish clear standards and procedures for every process and continue to improve them to eliminate inefficiencies.

6. Use Data for Decision Making:

In a world of digitalization, this is the most crucial capability, where an organization’s decision-making is based on credible data harnessed and collated from its core systems.

Collect data on every process, analyze it, identify trends and opportunities, and make informed decisions. Data-driven decision-making can significantly improve the organization’s performance and profitability.

Building a lean culture requires time, effort, and resources; however, it is essential that organizations embrace the culture of agility and lean in a low-profit margin market. It reduces waste, improves efficiency, increases customer satisfaction, and helps drive profits, then why not embrace it?

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