Managers, like gardeners, like to see growth. For Mary Frances Dwyer introducing lean business practices has helped the business she manages, Ardcarne Garden Centre in Roscommon, flourish, despite increases in the cost of doing business.
Ardcarne was founded in 1986 by her boss, Ronan O’Conghaile, a landscape gardener whose customers wanted him to supply them with plants, which he had to go to the east coast to get, explains Dwyer, a horticulturalist. She started working in the business the day before it opened, in Boyle. She was its only employee.
“I started with an eight foot by six-foot wooden shed, a calculator and a wooden box,” she recalls. Today the business has two garden centres, including one in Roscommon town, a landscaping business, a cafe and an online shop. It employs 50 people, making it a significant employer in the area.
Over the past 18 months the cost of doing business has increased significantly. “Everything has gone up: black plastic pots, compost, cane, transport, labels – you name it. The cafe is a big energy user and that has gone up too, and you can’t just pass these increases on,” says Dwyer.
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Instead, she has taken a different approach. “We focus on productivity. We can’t control the cost of goods in, but we can control labour costs. We can bring more efficiency to what we do and we can be more productive,” she says.
She works with a business consultant who specialises in ‘lean’, a practice of continuous improvement which began in a Toyota car plant in Japan in the 1950s. Initially a manufacturing methodology, today it is applied to businesses of all kinds, including service and retail enterprises.
It’s the lever Dwyer has used most to help Ardcarne cope with the rising cost of inputs. “We initially started learning about lean because we wanted to learn how to make the cafe more efficient, to be able to serve more as efficiently as possible and reduce waste,” says Dwyer.
It has since spread to every aspect of operations, from inventory management to the way goods are picked and packed for ecommerce. Dwyer views each element of the business through a lean lens, putting in place systems and processes that boost efficiencies and reduce waste. That includes hidden waste. By introducing more efficient stock control practices, for example, she reduced incidences where particular items ran out before being reordered.
If a customer didn’t buy an alternative, that’s a lost sale. “And these days, with supply issues, everything takes longer to get back in,” she says. By introducing simple visual checklists, which staff can carry out in seconds, inventory levels are now permanently optimised. “It ensures we have the right products with the right stock. May was one of our busiest months ever and all the new processes allowed us to manage that efficiently – that and a great team,” she adds.
Looking through a lean lens
Dwyer works with Paula McNicholas, a lean business consultant who started out in the automotive sector with marques such as Rolls-Royce and Bentley. “Lean is all about time and identifying where time is being wasted. Because wasted time is wasted money,” says McNicholas.
Too many managers waste time fighting the kind of fires that good systems and processes would eradicate, McNicholas believes. She recently worked with a company whose vehicle fuel bills turned out to be unnecessarily high because poor estimating practices were leading to unnecessary trips. By standardising the estimating process, fuel costs halved.
Lean requires good communications, so that if something is going wrong staff feel empowered to say so and to make suggestions to improve it. More than anything, it is about culture. “People think it’s a technical skill but it’s not. It’s about continuous improvement and about having respect for people, which is why it’s so great for solving problems and coming up with solutions,” says McNicholas.
In a tight labour market, establishing a corporate culture where people feel heard, respected and empowered to make suggestions will also help you to attract and retain good people, she adds.
There are a number of state supports for businesses keen to introduce lean practices to their business, including from the Local Enterprise Offices, Enterprise Ireland, IDA and Údarás na Gaeltachta.
“The benefits are manifold. Lean has an impact on quality, on speed of delivery, on reduction in cost,” says Robert Hernan, senior lean adviser at Enterprise Ireland. “It’s about boosting productivity while ultimately using less time, effort and resources. Companies become more dependable as well as more flexible and agile in their ability to respond to changes.”
It’s also about giving yourself the best chance to compete. “If you’re not doing things better, you can be sure your competitors are,” says Hernan.
Scaling without stress
Lean is underlined by a scientific way of thinking, but not so much about “time and motion” as about using data to solve problems, he adds. “That’s where leadership comes in, to bring people along with it by giving a clear vision about its purpose. What you want is a proactively problem-solving environment. You’re asking people what ideas they have to help improve their work. It can’t just be parachuted in from the top down.”
A lean culture is an invaluable in a time of rising costs. “Lean is about seeing opportunities wherever you can, whether for new products or new export markets,” says Hernan. “Very often you see leaders with poor systems in place who end up firefighting all the time. What lean does is help to stabilise the systems, so that leaders can delegate, leaving them to spend more time customer-facing and generating revenues. It is about scaling without stress.”
Lean is particularly useful for SMEs, says John O’Shanahan of Lean BPI. “Management in smaller businesses are juggling all the time. They can’t do what a bigger business does, which is just take on another supervisor or manager. We are becoming a high-cost economy so if you grow your people, all of a sudden you’re not making money,” he points out. “Lean is not about saying you need to improve. It’s about finding the best way to do that for your business.”
Increasingly the quickest way to do that is through digitising to improve business processes but putting in place systems of any sort will help.
“Big companies understand they just can’t operate without a system of some kind. A lot of small businesses can get away with not having systems but the good ones are systems driven,” says O’Shanahan, adding that right now labour costs are increasing and staff availability is more difficult to manage. “All of a sudden there are gaps if a staff member is missing,” he says. “If the system is not automated, it’s very hard to fill those gaps.”
Not getting caught up managing a process allows you to do higher-value work, such as grow sales, or develop new products
— Stuart Nelson
The intersection between lean, green and digital transformation supports from state agencies is beginning to have a significant impact on operations, says Stuart Nelson of Jigsaw, a lean service provider.
“For example, in terms of the cost per unit of energy, it’s about both being green and trying to bring it down through the use of renewables, and it’s also about being lean so that you are getting more out of each unit you use. So the cost per unit might not be coming down but you’ll be getting more out of it,” says Nelson. “All these efficiencies mean you can do more with what you have, so that even if costs are rising, your margin holds.”
Where you don’t save money, you might save time. “Not getting caught up managing a process allows you to do higher-value work, such as grow sales, or develop new products,” says Nelson. “Rather than manage the work, you can grow and innovate the business.”
