What is Lean, & How Does It Improve Business Operations?
People who manage the operational aspects of a company or organization have a number of tools, methodologies and technologies available to help them facilitate efficient processes and improve operations. There are countless books, consultants, seminars and even certification programs available to managers who are seeking a better way of doing things.
You can’t spend more than a few minutes in the world of operations management before you begin hearing about Lean. Indeed you may find yourself assigned to a team or position responsible for implementing a Lean program in the context of your own job responsibilities.
What Is Lean?
The first order of business when implementing or bringing a Lean program online is to obtain an agreement on what the program is supposed to accomplish. That may seem somewhat elementary, but it is essential. Lean has unfortunately acquired a number of definitions over the years, some of which are not altogether positive. The simple fact is, Lean means different—vastly different—things to different people.
The Wall Street definition of Lean – Lean is good for stock prices. Many investors see Lean in the context of expense reduction—reductions achieved mainly through layoffs. The resulting expense reductions are reported against otherwise flat or even lowered earnings as profitability increases. Who doesn’t love profits?
The Public Relations definition of Lean – PR is all about managing the public-facing image of the company or organization. Companies that lay off workers, outsource large segments of the business or move manufacturing operations offshore frequently do these things under the guise of a Lean initiative. Again, Lean becomes a code word—a word loaded with negative connotations because the public has grown accustomed to companies carefully couching words in their press releases to buffer bad news.
If this is the kind of Lean your management has in mind for your project, you need to understand that. Your responsibilities in implementing that kind of Lean are more about damage control and less involved in process review.
Real Lean – The kind of Lean that backs up successful companies like Toyota is all about the efficiencies realized through focusing on eliminating waste and delivering value to your customer. That kind of Lean is not a costing-saving strategy, it’s a growth strategy. It’s also not implemented with a press release or by sending out layoff notices. Real Lean orients the organization toward a growth footing. It positions the company for growth by facilitating flexibility and agility and the ability to accommodate growth.
How to Achieve Lean Operations
Lean initiatives are usually accomplished through the efforts of senior-management sponsorship and team-oriented execution. Lean teams are cross-functional in nature and served by leadership who is comfortable with dealing and working at all levels within the organization. In addition to a permanent core membership, the team should also have temporary membership representing functional areas directly involved in a given portion of the Lean initiative.
Team members need to have analytical skills that can see beyond specific personalities involved in a given process and be able to visualize how the process itself needs to function. The focus of the team should be process improvement as opposed to personnel issues if the goal is to improve operations.
Steps to Lean
A quick Google search on Lean implementation will return a number of lists outlining the “critical” steps to achieving a Lean organization. I’m not going to tell you that there are six, 10 or 38 critical steps to implementing Lean in this piece. However, there are some essential points to include in your plan.
- Enterprise-wide review – This is simply a high-level cataloging of your primary processes. Review each process and compare it with an “ideal” or world-class version of that process. Categorize each process in terms of its own criticality—its relative need for improvement. When you are done, you will have a list of priorities to guide your focus throughout the initial process.
- Publicize and educate to improve operations – Your team and the general population of the company will want to know what exactly your team is going to accomplish. This requires getting your team conversant in Lean vocabulary and acquainted with Lean processes. It tells the rest of the company that you are doing things that will make life better for them.
- Start with the physical organization – Years ago, companies had methods and procedures experts who would design workstations for the processes performed there. A lot of this was based in ergonomics. This is a great place to start looking for waste. Wasted movement, wasted effort and wasted space all can be alleviated through the intelligent arrangement of tools on the workstation relative to the person using that station.
- Product and process – Review processes by examining where and how your product moves through your organization. Where are errors likely to occur? Where are delays found? Where are unnecessary steps being performed? This is frequently called Value Stream Mapping.
- Think in terms of cellular design – Rather than designing long assembly lines, look at how the product is actually built. Frequently pulling together tools and processes into a series of manufacturing cells reduces the waste of unnecessary movement and allows concentrated effort to complete larger portions of the build process more rapidly.
- Look at traditional Lean tools that improve operations – Consider the notion of mistaking proofing processes, employing simple visual controls such as Kanban to reduce the set-up time, the replenishment process and other resource-constraining processes controlled through human language. Kanban signals are far more efficient than calling the warehouse, emailing your supply managers or other error-prone communication methods.
There are numerous methodologies and philosophies offering systematic approaches to Lean that are worth investigating and considering, including: Total Quality Management and Six Sigma. These offer frameworks on which to build your Lean program.
Final Thoughts: Lean Operations Require Practice
The most important aspect of embracing Lean is to remember that Lean is a journey, not a destination. Continued monitoring, measuring and tweaking will keep your program in tune and your operation trim.
Your Lean team should establish an ongoing process to review and report on progress over the long term. Too many good Lean programs are started but end up failing because management assumed that the program would eventually just run itself.
Lean is a practice, and that means it must be practiced to improve operations.