The Importance of a Lean Business Model

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The term lean was coined to describe Toyota’s business model during the late 1980s. When it comes to a lean business the idea at its core is to maximise customer value while minimising waste. Lean means creating more value for customers with less resources.

The ultimate goal in a lean business is to provide value to the customer via the value creation process that has zero waste. A lean business understands customer value and focuses key processes to continuously increase this while simultaneously decreasing waste. To achieve this, lean thinking changes the model of management from optimising separate resources and vertical departments to optimising the flow of goods and services through the entire value streams that flow horizontally across resources to customers.

When a business moves from its traditional models to new lean thinking it encompasses new trains of thought that require a complete transformation on how a company conducts business. This is a long-term strategy that requires perseverance.

There are three fundamental business issues that should guide the transformation of the entire organisation to a lean business. These are Purpose, Process and People.

Purpose

What is a the customer’s problem that a business wants to provide a solution for to achieve its own business growth and that is worth pursuing? After all we are here to make a profit!

Process

How does a business assess major value streams to ensure that each step is valuable, capable, available, adequate, flexible and that these steps are interconnected? This is what we mean by decreasing waste in using resources. Is your time spent wisely to minimise wasted resources?

People

How can the business make sure that every important process has someone accountable for the continuity of evaluating that value stream in terms of a lean business? How can people that are incorporated in the value stream be actively engaged in the correct administration of it and continuously improving it?

Now with this in mind, there are a several guidelines than enable you to develop a lean business model:

Be unique

Instead of copying someone else’s model, you should use model design thinking techniques to generate innovative business ideas that win. This is true for businesses in the food and beverage manufacturing sector. Offer something genuine and unique that adds value to people’s lives.

Embrace change

Change is your greatest constant. Your model will change as soon as you go through many phases of business. The general rule of thumb is, prepare for change.

Create your unique value proposition

Depending on your business strategy, you might have to revise your value proposition to differentiate your business model.

Review

Your first idea is nothing but what you think might work. Draft your first version and develop your initial business model. Once completed, start testing it outside the building by listening to your customer feedback and revise accordingly.

Leverage opportunities with your customer

It’s all about how you can use your value proposition to add value for your customers. To achieve that, you must design both your business model and your product/service to address your customer. A great place to start is by answering these questions to find your ideal customer.

  • Are they male or female?
  • How old are they?
  • Single or married?
  • Where do they drive inspiration from?
  • What worries them?
  • What do they do on their weekends?
  • What social media platforms do they use?
  • Are they parents?

Write a summary of these components and pin it on your wall. When you are thinking about implementing marketing and business initiatives this shortcut will help you think about your ideal customer and think about their needs and see if you are adding value to them.

With this information outlined above in mind, lean business thinking is a new business model that looks to create zero waste while using minimal resources and adding value to your customers. It is new age thinking that will help you get a competitive advantage and stay ahead of the game.

In the coffee industry? See how lean manufacturing can improve the coffee roasting process.

More about the author:

Melanie - Unleashed Software
Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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