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Caledonia engagements are driven by lean thinking—a comprehensive set of principles, tools, and rules pioneered and refined by Toyota over the last half century. Today lean thinking is used by virtually all world-class companies as well as some conglomerates, such as Danaher. Lean addresses performance in all areas of the business and is appropriate for all types of businesses whether relatively small or large, high or low volume, capital or labor intensive, commodity or mass customization, and whether union or non-union.

Lean thinking spread first to automotive (where it was dubbed “just-in-time”), then to other manufacturing sectors, and finally to services, particularly health care, and logistics and distribution. Today, virtually all companies, regardless of the degree to which they embrace lean, tout their commitment to it. The reason is simple. Implementing lean dramatically reduces working capital, capex, and other costs while driving world-class quality and customer satisfaction. The company in an industry that has most fully implemented lean is almost always the most profitable. Lean is so powerful that the cost savings and working capital reductions from implementing it typically result in real time improvements in net cash flow, even considering the cost of implementing lean, including consulting costs.  

Lean is viewed, and rightly so, as a method to achieve sustainable improvements, mainly by eliminating “waste” and establishing self-managed systems—both of which engage employees and drive accountability. The latest frontier in lean is creatively applying advanced engineering methods to improve existing processes by reducing the “value adding” costs. And lean tools are applicable to all areas of an enterprise including, among many others, product development, accounting, manufacturing processes, scheduling, and even marketing.   

Caledonia’s proprietary lean assessment tools, developed and refined over 15 years, enable us to rank on a scale of 1 (well below average) to 5 (world-class) dozens of discrete activities that make up a company’s major operations. Most companies we assess average 2.5, but some activities may be a 5 while others may be a 1. Using the rankings we can quantify cost-reducing and quality-enhancing improvement opportunities, which existing management can exploit, with or without our assistance.

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