Use Lean to give customers what they want and tackle the challenges you have not noticed before.
My name is Nicholas Lawley. My mother would never shorten my name, but my friends call me Nick. I am 63 years young. I retired from full time work when I reached 60, but have continued to help companies to “see”.
Global Operations Director aka GOD
I have only worked for two companies in my career. Both were American multinationals. The first company I started as a tool room apprentice. Through the years I progressed through many manufacturing management positions, ending in a global role training and advising in business development. As my position was Global Operations Director, I was commonly referred to as GOD. Although of course, I couldn’t perform any miracles, I was always striving to help people open their eyes and see!
It was in the early ’80s when I was first exposed to Lean.
The company I worked for were interested in a joint venture with a Japanese company. The Japanese company were a supplier to Toyota so understood lean in great detail. This was my cue to another world.
I joined the second company by a chance meeting with an old friend. This was a total career change for me as it was a Sales organization. This required a different approach to Lean Deployment as it focused on the administrative process. Lean Office, in a lot of ways is the same as in manufacturing. It’s just the process flow is more difficult to see. If you can’t see something, you don’t measure it. So, it tends to be left alone as the norm.
My expertise is what, you may have heard of, as a Lean Practitioner. For many years I applied Lean Tools in situations in manufacturing and administration. Only to find after a few months the new methods would slip and return to the old ways.
I think there are many reasons for this. It could be job pressures, the end of month big push, people changes, lack of training, etc. But it occurred to me, that people did not know what to do when the process broke down. So, they just returned back to the old process because they were comfortable with it. Funnily enough, the improvement the team made became the problem. Then, Lean starts to get bad press.
I learned very quickly. Lean did not create the problem. Lean helps you to see. It highlighted the problems that were already there.
It took a long time to realize that Lean tools alone would not make the Paradigm Shift required for the business to achieve upper quartile performance in profitable earnings or shareholder value. You needed a new direction. The direction based on strategic goals or what would be considered best in class in that industry. Lean tools are just part of the road map to help you get there.
I think business trends have changed rapidly in the last ten years. Technology and media have helped drive this. But also, investors want return on investment quicker. Twenty-five years ago, companies spent a lot of time developing 5-year strategic plans. Not now, three years max, with a twelve-month detailed plan.
Agility and speed to react to market place changes are the norm, with a very strong understanding of the Costs associated with serving the market place.
Toyota motor company are recognized as the developers of Lean Tools, through there Toyota Production System, TPS. After the war Japan had limited resources and raw materials, so Toyota were highly motivated to create such a system. There has been a continuous evolution of this system, designed and repackaged to support modern day business requirements. But one point not to underestimate, it is still a Management Philosophy as much as a system. I won’t go into detail of tools, as much has been written already, and freely available on the net.
There is no doubt, administrative work is perceived as more difficult to deploy lean thinking, purely because of the number of factors that make office work office work.
In my experience it’s always a challenge for White-Collar, employees to accept the fact that their job is normally only a small part of a bigger picture. We call the big picture a Value Stream.
The approach I have always taken is systemic, to teach the organization to See.
Starting with a selected area and team. A great tool to help quantify this choice is to create a Project Charter. This gives all stake holders a chance to Buy In to the project and, importantly set the boundaries and expectation.
The selected team would be trained, then taught to create a Current State Map. As I have mentioned earlier This helps the team to really understand what’s happening, not just at their own desk, but up and down stream of a process.
They would be taught to see waste in their daily environment. Waste is a big driver of cost. Interestingly, and as much as we may not like it, only 5-7%. Of our daily job can be considered Value in the eyes of the customer. The rest will fit into a waste category somewhere.
The team would identify waste opportunities and clearly mark the current state map where these opportunities occur. I would complete this by making the waste opportunities into Problem Statements. These will help the team create the action plan and road map later.
Next, the team would design their future state. Before working on the future state, always ask:
What is the value of this transaction?
Who is the beneficiary of this?
How does it add value to our customer?
This really helps focus the team to ask themselves, do we really need to do this?
Once the future state has been designed, Create the action plan, and design the tracking centre, to track and discuss changes, and how they are affecting ongoing performance in the Value Stream. During the Kaizen, we would be selecting various lean tools, that would help add value like, Standard Work, F.I.F.O. verses Flow, Takt Planning, all designed with Operational Excellence in mind. It is expected that management take part. Operational excellence is a collaborative effort, not pushed down from the top.
I have mentioned the customer many times in this article. In many events just recognising who the customer is has been a highlight. Once you recognise who the customer is, you then can respond to their needs. Not all customers are the same.
In a lean environment it helps to group certain types of customers together. Then, it’s much easier, to design your own organisation to best meet the customer need.
An example of this, was a business I supported who organised there Claim and Cash collection teams by customer language. This turned out not to be the most efficient. Some customers paid automatically, some manually, some needed high levels of paperwork, some required less communication. When you have large groups of customers, who want you to do business there way, it becomes a real challenge to be able to support them and maintain a competitive advantage. it only serves to stop the natural flow of your own business process. When processes do not flow without interruptions it increases your costs experientially.
While the movement of lean into non-production business processes is underway, it’s far from ubiquitous. For example, 55% of manufacturing plants indicate the primary improvement methodology they follow is lean manufacturing, lean and six sigma, or the Toyota Production System, according to the Industry Week/Manufacturing Performance Institute 2017 Census of Manufacturers. I thought that percentage seems on the high side, but they went on to say, 37% of the lean plants report only “some” degree of implementation, (that tells me they are implementing tools rather than a system.) which conceivably could be as limited as 5s. Of all plants along the lean journey, a fraction has expanded it to other business functions: purchasing (at 37% of plants), engineering (28%), finance and accounting (15%), supplier relations (18%), customer relations (18%), administration (18%), and R&D (8%). The numbers hint at the challenges of applying lean in non-production environments—lack of process orientation, inability to identify the customer, little standardization, and a propensity for rework.
In summary, continuous improvement cannot be taken for granted, you have to work on it, and is NOT FOREVER! What? – you may ask. You have to tell your organisation where the destination is. Everyone needs to know the end game. Motivate your teams toward it. Then everyone will know where you are going, and how long will it take to get there.
You must have management commitment; managers need to engage in the process. You must have a clear direction, not just a vision. Most importantly, it needs to be embraced, discussed, and be fun for everyone.
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