Executive Branch Regulators Could Learn from ‘Lean’ Thinking

By February 11, 2011Regulations

Rich Gimmel, president of the Louisville-based Atlas Machine & Supply, Inc., testified Thursday before the House Judiciary Subcommittee on Courts, Commercial & Administrative Law’s hearing on H.R. 527, “Regulatory Flexibility Improvements Act of 2011 – Unleashing Small Businesses to Create Jobs.”

Rich, a member of the Board of Directors of the National Association of Manufacturers, brought his own business experience to bear on the challenges of excessives regulation. From his prepared statement:

NAM Board Member Rich Gimmel of Atlas Machine

A decade ago, many of us in manufacturing transformed our operations by adopting a Japanese principle called “lean” thinking. The concept is very simple. You identify everything in the organization that consumes resources but adds no value to the customer. That’s called, “muda,” or waste. Then you look for a way to eliminate efforts that create no value. My modest proposal is that the government learn something from manufacturing and incorporate ―lean thinking into the development of regulation.

A careful and thoughtful analysis of every regulatory requirement and its absolute necessity and an estimation of its value are important when considering regulations that will be imposed on small businesses. Many of the proposals being offered by this Subcommittee — including more detailed statements in the RFA process and requirements to describe duplicative, overlapping or conflicting regulations — will do just that.

But an even more important way to incorporate ―lean thinking, the elimination of waste and continuous improvement is through amendments to the periodic review requirements of Section 610 of the RFA. There was great hope that this original provision would rationally reduce or eliminate unnecessary burdens that had outlived their usefulness or had not appropriately considered the concerns of small business when they were first promulgated.

Video of the hearing is available here.

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