One of the advantages Magnolia & Willows has above many other small businesses is the 10 years of lean management experience I have.
If you’ve never heard of Lean Manufacturing before then I will say it is both the simplest and most complex management principle.
The idea of lean manufacturing was birthed in Japan in the early 1930’s. While many businesses were going out of business due to a severe depression, there was one company who beat the odds and stayed open.
They used some common ideas, but they used them collectively to remain profitable in a time that no one had any money.
The original ideas were simple
Take care of tools, machines that we have so they don’t break. (Preventative Maintenance)
Only make and purchase supplies for items that are sold. (Lean supply and demand)
After the company stayed in business, A man named Taichi Ono came to America to gather some inspiration from our manufacturing plants.
His biggest inspiration came from a grocery store!
He was amazed to watch a customer pull a gallon of milk from a cooler and see the stock person add a gallon of milk.
For him it was an epiphany! If his company could build only the amount of product that was taken, then it would be very efficient.
In lean manufacturing you create a baseline for how many and what items sell, then you only make a replacement.
This is why I say lean is the most complex and simplest thing. It’s a no brained to make another item after the last one is gone, but how many items are going to sell? How many should you have on hand?
When I see videos of other candle makers with beautiful stores or workshops and there are 1000’s of fragrance oils, vessels or products lining shelves - I’m not impressed. I cringe and my skin crawls.
Every time I wonder how long before they are out of business.
Consider these things
That is a lot of money tied up in products that could be used for advertising, partnership, product design or (shock) savings.
The longer those items sit there the more chance of damage! Candles are easy damage room gets hot, then cold they crack. Dust floats around they are dirty, cat sneaks in room? Or a bird or whatever maybe a child now they are broken.
They don’t have to be candles to be damaged, the sun on a picture over time will fade it, the fibers of a blanket will start to crack if folded. It is just insensible to keep large amounts of inventory.
3. Things go out of style. That amazing mushroom shaped container may be cool now but inevitably one day most products will not be so coveted.
4. Movement. Having so much inventory just sitting means your eventually going to have to move it. Take it to show, dust under it rearrange the room The more product you have the higher chance it will have to move somewhere
So, what is the solution to this inventory problem?
Toyota has one of the best lean principle. they pre sell their cars to dealerships, so what they are making today has already been bought by dealership.
In fact they know how many cars they will sell to dealers for the next months or year.
they can then turn around and level load their production.
If they have 1000 orders for March. They know they have 23 working days in that month.
They will make 43 cars each day- no more no less.
We as small business owners are not so lucky. I do not have customers calling me to order candles for the next months or years.
but we can easily apply these principles to our small business.
Just remember the grocery store. Make 1, 2 maybe 3 items and put it on your shelf.
when it sells, then make another.
I think this is the first guiding principle of small business, and one we get away from so easily.
We are creators, we want to make, build, buy. We want to develop a million things and they are going to be awesome, and everyone is going to love them.
But once you move from hobby to business your hat changes. It is no longer just about making pretty things, if your business doesn’t make money then it will eventually be broke.
Protect your dream by taking time to create products that sell.
- I love my small business and I love Lean Production principle!
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