Lean improves Cash Flow by 38%

In these economic times where “Cash is King”, lean thinking provides a set of principles which can be used to dramatically improve cash flow.

The example we’ve come across here shows how lean thinking can be used to

  • improve cash flow
  • improve customer service
  • improve organisations in the service or knowledge sectors

and proves you don’t even need to resort to slashing stock levels, especially if you don’t have any!

The business in question is Stiles Associates LLC, an executive recruitment agency and the story was mentioned in Lean Directions, using lean thinking Stiles Associates achieved the following results;

  1. 29% reduction in time taken to fill a vacancy! filling in under 90 days
  2. 38% reduction in debtor days, which had a massive impact on cash flow.

They achieved this by conducting

  1. value stream mapping (including their customers)
  2. kaizen events 
  3. daily meetings to highlight completed, outstanding and on-going tasks
  4. visual management systems.

Goes to show that the promises of improved business processes, better cash flow can be achieved through lean and in sectors other than operations or manufacturing.

If you want to read how lean can be applied in marketing, sales or accounting then please visit our website www.resqmr.co.uk to see how we approach these areas as well as the traditional manufacturing/operations areas.

Or contact us at info@resqmr.co.uk , Mark.

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