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In my last blog, I mentioned that I am occasionally asked to describe Lean and explain what it does for an organization. This is a continuation of that last post, and I will provide a brief overview of each of the five principles of the Lean methodology.
The focus of Lean is on maximizing value for customers and the organization by eliminating wasteful practices, streamlining processes, optimizing the flow of work, and ultimately seeking to produce very high quality services (or products). As a part of these efforts, Lean leads organizations to identify the root causes of problems and find solutions to them. The methodology also emphasizes ongoing measurement and careful assessment of how processes function, and their continual improvement. All of this comes from a standard set of tools or methods to execute the various stages of the improvement process and make it a regular and standardized part of the everyday work environment.
To begin with, an organization must be able to see the core value that it creates and identify it in each process. Until value has been defined, and the actions that create it are identified, the organization will be unable to improve and perfect their services or products. The Lean methodology says that process steps can create value, not create value but be necessary for the process to function, or create pure waste. The goal of Lean is to maximize the value created by the process while minimizing the non-value adding but necessary steps and completely eliminating pure waste.
It should be noted that value is always defined from the customer's point of view. Because of this, Voice of Customer (VoC) data collection and analysis are an important part of Lean. The information collected from customers helps improvement teams identify the value created by the process and locate and close gaps in services.
The creation of value in a process does not just result from the discrete process steps themselves. It begins with all of the elements (knowledge, skills, abilities, and materials) that go into the process and are a part of creating the service or product for the customer. The value the product or service provides may also have impacts beyond the customer who directly receives them. For these reasons, Lean looks at the entire stream of effort, inputs and results, which is referred to as the Value Stream. The value stream includes a variety of factors like service or product design, marketing, ordering, production, service delivery, logistics, and technology systems. Lean practitioners use tools such as Value Stream Mapping (VSM) and standard process mapping to document, understand and describe the process, and to communicate this information to others.
Once the value stream has been identified, efforts turn to making sure that work and value flow quickly and smoothly through the process. This flow must occur regardless of any functional or job boundaries that the process crosses. The goal is to have continuous non-stop value-addition once a request for service has been initiated by the customer.
Lean improvement teams take steps to eliminate batch-and-queue processing, or manage it in a way that minimizes its negative impacts (waiting, idle resources, idle inventory, excess storage, etc.). This is especially important in office environments where batch processing is often considered a best practice, but in reality creates a great deal of waste and customer dissatisfaction.
Improvement teams also work to refine and improve the scheduling of work in a way that syncs efforts with demand, allows employees to quickly change between tasks, places related functions and tasks together in cells to reduce the time between steps, and facilitate communication between staff.
In a Lean environment, it is desirable only to produce what is needed when it is needed. Traditional business processes tend to push work from upstream steps to downstream steps and ultimately to the customer. If the downstream step is busy and not ready to receive more work, then the output sits idle in a queue and the process will have produced part of a service or product that is not yet needed. This is considered a wasteful practice, as resources have been used and what has been produced may not be needed in the future. Lean processes are set up so that the downstream steps set the pace, and work is only done when a downstream step indicates it is ready to take on work. This is referred to as Pull.
Service environments are inherently pull systems, as most services we think of do not happen until a customer requests them. It is the request that causes action from upstream functions. The concept of Pull goes beyond this basic definition and includes activities like the standardization of work, and the proper scheduling and managing of work in queues. Controlling the amount of work that enters the process and queues allows managers to maintain a pull system, and avoid having work build up or be haphazardly pushed downstream. At times, resources may also need to be ‘pulled’ temporarily from other areas to assist in reducing long queues and maintain workflow.
The fifth principle of Lean is for practitioners to seek perfection. This starts with an organization developing a clear direction for the organization and a vision of perfection as it relates to the services and products it provides. This includes defining:
With a clear direction in place, an organization can then work toward producing the highest quality services and products possible. In order to avoid overwhelming operational units, the approach should be to start small and help the units build their abilities and remove obstacles over time. For this reason, these efforts can be termed continuous improvement, as changes will take place at intervals spread out over time. Improvement teams will use a variety of tools and approaches to create processes that produce high-quality, high-value services and products. In their pursuit of perfection, Lean practitioners will pay special attention to reducing complexity, eliminating wasteful practices, and reducing costs.
In the next blog, we will look at how Lean differs from other process improvement methods, where they overlap, and how they can be used together to develop a powerful toolbox for service improvement. As always, I welcome your questions or comments. You can email me at firstname.lastname@example.org.
About the Author:
Clayton Taylor, MBA, is a Management Research Analyst, Pr. and Certified Six Sigma Master Black Belt working in the Office of the Executive Vice President, Treasurer and Chief Financial Officer at Arizona State University. He currently consults with nine diverse Business and Finance operational areas to lower costs, improve operational efficiency and provide the highest quality customer experience to internal and external customers. Mr. Taylor can be reached at email@example.com.
Locher, D. (2011). Lean Office and Service Simplified. New York, NY: Productivity Press
Womack, J., Jones, D. (2003). Lean Thinking. New York, NY: Free Press