Concept, Tool & Approach

Is your company healthy (both lean and agile)?
Just like human individuals, companies can become fat and slow if they don’t keep themselves fit or if they don’t watch their nutrition habits. Sometimes companies become too slim due to cost reduction actions, resulting in deteriorating customer service. Companies need to be both ‘lean’ and ‘agile’ simultaneously, a state of company health we coined as ‘lean agility’.

CMI is analogous to BMI
While the BMI (Body Mass Index) is well-known for measuring an individual’s lean mass based on weight and length [weight in kg/(length in m)²], the CMI Lean Agility® Company Mass Index measures the lean agility of a company as a means to evaluate its business health for future success.

Equivalent to a BMI where optimally one’s BMI should be between 18 and 25, we developed a CMI Lean Agility® where optimally, a healthy company performs somewhere centrally, not too fat and not too slim. The right hand side of the curve below illustrates a company with “too much fat”, or “waste”, hence highly inefficient and slow to react in an agile way to changing market dynamics. A CMI score at the left illustrates ‘company anorexia’ where cost cuttings prevent a company from reacting swiftly to changing market and customer requirements due to resource scarcity. In this case, the company is working so close to its capacity limits, that it can no longer cope adequately with normal process changes such that customer service suffers: the company is not agile.

 The concept of Lean Agility is at the core of our CMI Lean Agility®-measurement. Lean in the meaning of ensuring process flow, minimal waste in the processes and the absence of any non-adding value process steps. Lean also as the current level of understanding and practical experience with the principles that were originally developed by Toyota, leading to ‘lean enterprise thinking’.

Agile companies are obsessed with adding value to the customer rapidly and solving customer’s problems swiftly. These companies are knowledge driven and have the ability to collaborate effectively with partners (suppliers, subcontractors, service providers & customers). Flexibility of resources, both machines and people, are always high on the agenda.

In today’s environment, companies have to be worried about being both lean and agility simultaneously in order to stay competitive; that is why CMI measurement is an excellent vehicle to determine what focused actions to undertake towards higher levels of competitiveness.