Increasing efficiency with Lean Management

In an increasingly volatile, uncertain, and complex business environment, it is more and more important to increase the efficiency, reactivity and flexibility of one’s organization and processes. Faced with these challenges, many companies are (re)launching Operational Efficiency initiatives.

To be successful, these initiatives require long-term optimization plans, but also short-term projects, allowing for quick wins and putting the company in a continuous improvement dynamic.

The Lean approach proposes a fast and iterative approach, allowing to enter in a virtuous circle where a realized gain allows to realize another one. In addition, this collaborative approach facilitates change management by involving operational staff in the optimization project.

What are the 3 benefits to expect from a Lean Management initiative?

· Value analysis and reduction of the time required to produce a deliverable thanks to the eradication of unnecessary or non-value-added steps

· Increase productivity through simple, quick, tangible, and quickly visible optimizations

· The implementation of a continuous improvement dynamic thanks to short (from one week to one month), collaborative and iterative projects

What is process optimization?

Process optimization consists of improving the way things are done in the company, to gain in performance, productivity, costs, or revenues.

A process can be defined as a system of activities using resources to transform inputs into outputs. An optimization project can therefore intervene on the inputs, on the resources, or on the scheduling of activities, with the sole purpose of maximizing the output.

Many process optimization tools and methods exist. To be successful, an optimization project must meet a few fundamental objectives:

· Generate concrete results and tangible gains thanks to a fast and fun approach

· Create a management dynamic by example, in which the gains generated call for future gains

· Involve operational staff in the analysis of existing processes and the definition of target processes to create a climate of trust and facilitate change management

· Follow up and start a continuous improvement initiative

· Lean Management (or Lean Office) tools can be used to achieve all these objectives, with a focus on value analysis and eliminating waste.

What is Lean Management?

It is an approach that aims to keep the company’s processes as linear as possible, focusing on activities that generate added value for the customer, at a minimum cost. This objective is achieved by eliminating all forms of waste in the processes, and by simplifying the value generating activities as much as possible.

A “Lean” process is one in which employees focus on priority on productive activities from the customer’s point of view, in an optimal way, i.e., without waste.

The Lean Management approach traditionally distinguishes seven types of waste to be eliminated from processes:

1. The process flaw: there may be unnecessary or non-productive activities in the process: several inputs, duplicate work, too many validation steps…
2. Movement: the arrangement of teams working on the same process can sometimes lead to a lot of unnecessary back and forth, making communication difficult…
3. Errors: it is possible that a process includes tasks of verification and correction of errors, in particular in the reporting activities
4. Waiting: it is common to have to wait for a signature, a validation, an information…
5. Overproduction: many organizations produce too much information, which makes it more difficult to use and takes longer to make decisions
6. Stock: it is common to multiply copies of a document
7. Transportation: the stock of information must often be moved, archived…

These seven forms of waste can have three sources: the process itself, which can be poorly designed; the procedure, which can be a poor application of a good process; or the data, whose quality can very easily influence the performance of a process or organization.

Lean Management is based on studies conducted in the industry, particularly among car manufacturers. It is recognized that in most administrative processes, wasteful activities represent about 50% of the total. On the other hand, activities that do not generate added value, but allow the organization to function properly, represent about 40%. This leaves only about 10% of activities that create value for the customer, which is a huge potential for optimization.

How to define the added value for the customer?

Value measures the ability of a process to provide a customer with a product or service that meets their specifications, at the right time and at the right price.

Value is therefore relative to the customer’s point of view, and must correspond to his expectations, in terms of price, quality, delivery times, adaptability, flexibility and intrinsic definition of the product or service requested.

Lean Management provides two major tools to address this issue:

· The Value-Stream Mapping allows to draw the existing and target processes by the angle of added value, and to discover visually and quickly, the waste, unnecessary waiting times…

· The “takt time”, which defines the time limit of the process to satisfy the customer’s needs, allows to define its productivity level

A process redesign workshop using the Lean Management approach will seek to optimize the added value / time takt couple.

How does a Lean workshop work?

A Lean workshop is meant to be short and intensive. The objective is to obtain immediate tangible results. Based on the Japanese concept Kaizen (“Do the best, make the best, improve it even if it is not broken, because if we don’t do it, we can’t compete with those who do”), the Lean workshop implements concrete, simple, quick, and inexpensive improvements, which are part of a continuous improvement logic.

A Lean workshop is also meant to be collaborative. The operational people of the process being optimized are part of the project and participate in a very active way in the analysis of the existing process, in the identification of the forms of waste and their causes and in the definition of the target process. Lean is above all about teamwork, brainstorming, consensus and a common will to improve. In a mature organization, a Lean workshop does not last more than one week. As a rule, the workshop takes the form of an intensive seminar, during which the operational staff is considered not available for business as usual. It is therefore important that all participants are on board before starting the workshop.

Depending on the maturity level of the organization, a process optimization mission can last from one week to one month. In the longest perspective, one to two weeks of diagnosis can prepare the workshop, which will take place over a period of one to two weeks.

The more the organization practices these workshops, the more maturity will allow for rapid optimization and continuous improvement.

Initially published on arnaudrioche.net

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