SAP Executive InsightLeadership in Times of Crisis: A Series
ENABLING THE LEAN ENTERPRISE
A THREE-TIERED APPROACH TO IMPROVING
YOUR OPERATIONSSeptember 15, 2008, was a sobering day. The bankruptcy of Lehman Brothers will affect the way companies operate for some time.
Realizing that survival meant preserving cash, many com-panies have quickly reduced workforces and inventory. And with lending practices uncertain, executives are keeping a close eye on future cash and financial performance.
In the past, many companies saw lean initiatives as a way to improve performance and competitive standing. But it was often tough to make the case for change when times were good. Companies are now motivated to align internal objectives and drive improvement. Moreover, as demand in many sectors subsides, companies have the available re-sources needed to execute. Now is the time to use top talent to transform the business.
Market leaders will take this opportunity to run leaner from top to bottom and emerge in a stronger position. Company executives can start by asking:. D o my centrally controlled corporate processes help me meet financial objectives and mitigate risk as transparent-ly as possible?. H ow can I streamline processes common across the or-ganization, using shared services, to eliminate redundant operations and reduce costs?. H ow can I improve the processes managed at a division level that are critical to my competitive differentiation?
2 SAP Executive Insight - Enabling the Lean EnterpriseEXECUTIVE SUMMARY
AT A GLANCE
Lean at Every Level . Shared services level: Other pro-cesses, such as finance and human Leadership Makes the Recently, many businesses have used resources, can be consolidated Difference in Times of Crisislean principles to move from a decen- across your enterprise - perhaps tralized corporate management mode to under a single COO-level leader. One thing is for sure: with every a hybrid model - recognizing that differ- When managed well, shared services economic crisis comes opportunity. ent functions require different levels of provide benefits that go beyond cost Some companies will go from good centralized management to be efficient savings. to great, and others will just fade and effective. . Division level: Some differentiating away, making room for more innova-processes require decentralized man- tive competitors. To be among the An effective lean transformation elimi- agement to be effective. These winners, executives should strongly nates more than the most obvious areas include sales and marketing, manufac- consider best practices that provide of wasted time and resource. A farsight- turing, supply chain, and others a balanced approach to moving for-ed, lean agenda leverages a tiered depending on your specific business. ward by including both cost reduc-enterprise architecture addressing the Ensure that your important differenti- tions and smart investments. SAP unique requirements of various busi- ating processes are efficient, integrat- has developed a series of Execu-ness processes (see Figure 1): ed, and demand-driven. tive Insights that highlight strategies . Corporate level: Some processes are your business can use immediately so critical that you must manage them A leaner operation, driven by optimized to run more efficiently and improve at the corporate level to maintain processes at every level, will pay out the customer experience - even in close control and transparency. Such immediate cost reductions and ultimate- today's economy.processes include enterprise-level ly improve your competitiveness in a performance and risk management, recovering economy. Benchmarking - The Facts of brand management, and sustainability. the Matter
The insights presented in this paper Value of an Integrated Platform are based on decades of expe-. Corporate strategy. Compliance and transparency rience in helping our customers . Corporate performance management become best-run businesses. An . Sustainability important tool in these efforts is the . Communication and investor relationship understanding gained from measur-. Brand managementCorporate ing and comparing the actual perfor-mance of companies across a wide . Finance range of sizes and industries.. HRShared Services . IT For more information about the SAP . Strategic sourcing benchmarking and best-practices . Customer relationship management program, ... [download for more]
