€1.5 billion in cost savings show that Lean thinking works for Irish exporters
Working from an island, as exporters must in Ireland, forces our businesses to be more competitive than those in the markets we sell to. The products and services that exporters develop here must offer customers more value than those of competitors. Irish exporters can’t just be good, they must be better.
Last month, a milestone in achieving that ambition was realized. More than 1,000 companies have now used Enterprise Ireland Lean Business supports to take practical steps to become more competitive and improve as exporters.
While the outcome of the Brexit result increased urgency, competitiveness is not a new challenge for Irish business. Enterprise Ireland launched Lean programmes eight years ago, in response to the then financial crisis. Improving competitiveness can be a matter of survival in times of crisis but all companies benefit from learning how to increase profit margins, build skills, reduce waste and increase capacity. Enterprise Ireland’s Lean Start, Plus and Transform programmes help companies at all levels of familiarity to find improvements, from design to manufacturing and service delivery, down to getting money lodged in the bank, through logistics and supply chain.
The results these first 1,000 companies have reported show that applying Lean thinking is a practical way to improve competitiveness quickly. €1.5 billion in cost savings have been recorded. Lean thinking is also good for the domestic economy, with participating companies reporting a 10% increase in employment.
Examples of what companies have achieved demonstrate the potential of Lean thinking for Irish exporters.
Thermo Air, a manufacturer and distributor of air and heating systems, reduced costs by 8% after completing Lean Start, reporting, “The implementation of Lean has been a very positive beginning to a change in the mind-set of our traditional manufacturing company. The future success of the business is on the right trajectory.” The application of Lean thinking enabled the company to reduce lead times from 6 to 3 weeks, multiplying the number of orders handled.
NutriScience, a manufacturer and distributor of animal supplements, reports, “This initiative was a real game changer. We went from being a reactive follower to being a proactive driver.” The company achieved €176k in savings, at 8.6% of turnover. In addition to a more engaged workforce and a safer work environment, lead time was reduced from an average of 8 to a guaranteed 3 weeks.
WhatClinic.com, a website that helps patients find clinics and book appointments, used Lean Start to implement a pre-sales process that boosted new business by 15% and increased their renewal rate to over 85%.
These examples show how practical Lean thinking programmes are. High-level thinking has been transformed into useful tactics that help companies improve today. The range of companies applying Lean thinking was clear at an event Enterprise Ireland co-hosted with the IDA in Maynooth last month. Speakers included representatives from the smallest companies to internationally award-winning practitioners. The depth of understanding attendees displayed shows that Lean thinking has been fully absorbed in Ireland. Experts travel to Ireland to learn about initiatives SMEs here are implementing. This December two Irish companies, Phonovation and Topflight, will host visitors from the EU-Japan Centre for Industrial Co-operation as part of a Lean in Europe series of best practice visits.
Reaching 1,000 projects is a high level of adoption but Enterprise Ireland aims to see that figure quadrupled. The take-up rate of Lean Start, Plus and Transform is rising as companies that see initial results progress further and companies yet to start feel the urgency of not being left behind. Other Irish agencies are keen to replicate the success Enterprise Ireland-backed companies have achieved. The IDA and Local Enterprise Offices implemented programmes that show how Lean thinking can be applied to make major competitiveness improvements for both multinationals and smaller regional companies. Teagasc and Bord Bia are planning similar initiatives.
Companies that are interested in joining a programme should visit the Lean Business Ireland website to find detailed information about supports and get inspired by nearly 100 case studies that show the savings and sales lean is already helping competitors to achieve.
This article was originally published in the Sunday Independent