Lean management, otherwise known as lean thinking, is a Japanese-born concept that refers to making continual, incremental improvements to the practices of any business. More and more marijuana entrepreneurs are discovering, however, that it is an especially useful tool to apply to their own companies.
The concept arose in the ruins of post-World War II Japan, when scarce resources meant companies were forced to do more with less.
In short, lean management is concerned with eliminating waste, and any other inefficiencies. Waste doesn’t just refer to physical waste. It can also include waiting time, unnecessary movement or motion, excess inventory, transportation, over-production and over-processing, as well as not fully utilizing one’s workforce.
As a newly-emerging and fast-growing industry operating under a patchwork of regulations in the US, the lean management approach is particularly useful across the cannabis sector.
From growers who want to ensure marijuana plants don’t spoil, or who need to move thousands of seedlings into larger pots, to marijuana laboratory testers who must ensure every analysis is on point, lean management processes can help achieve better results.
One of the tools used under lean management to improve company processes is known as 5S, which stands for Sort, Set in Order, Shine, Sustain, Standardize and Sustain.
“We started to use the “Five S” approach to organization and the hierarchical meetings that lean utilizes, which is mostly focused around a daily huddle that’s very structured,” said Mason Walker, co-owner of Oregon craft marijuana grower East Fork Cultivars. “We started to roll out all these tools at our farm, and it was incredible to see the small, scrappy farm able to really systematize the things that we weren’t excited to do and we knew weren’t adding value, like transplanting clones or trimming flower—those kinds of things that are very repetitive.”
The first step in 5S encourages reflection on even seemingly minor issues then seeks to eliminate the cause of that issue at its root. The second involves asking simple but critical questions like, “Does this need to be here?” and “How easily do I know how much inventory I have?”
After coming up with answers to such questions, you then set about organizing your workspace/retail outlet/warehouse along those lines, put a system in place to standardize it is as a company operation, and instigate measures to ensure they remain that way.
The result, in theory, is a better organized and easily navigable work area which will also be safer.
Another concept incorporated under lean management is known as the ‘Gemba walk,’ which is the Japanese word for “actual place”
It refers to the part of the business where value is actually created for clients or customers. So, for a marijuana testing lab, it’s in the laboratory itself. At a cannabis cultivation site, it’s the plant itself.
The idea is to take the Gemba walk throughout the part of the business where the real value is created, and find ways to make improvements that will improve quality and increase speed. This can take the form of noting down then reviewing key performance indicators (KPIs) with other members of the team to come up with ways to make lasting improvements together.
While lean management is simply a set of tools and ideas that any business can apply, it takes time and dedication to do so properly. It can even require changing a whole workplace culture, or necessitate concrete investments in training and equipment.
Many marijuana businesses don’t have a great deal of time or money to spend on management processes, but investing wisely in a lean management consultant for training sessions can pay dividends quickly. But it’s also important to view lean management as a long-term, continuous process of improvement rather than a quick fix.
As the marijuana industry in the US continues to mature, competition is heating up amid ever-evolving market and legislative dynamics. To stay ahead, cannabis entrepreneurs will need to constantly think about how they can do things better. Lean management offers a framework within which to ask these questions and act on them.
The approach, after all, developed from the ashes of the second World War, so it should also find fertile ground as the US hopefully leaves the failed drug war behind.