Lean Office: The Next Frontier

Posted on26. Apr, 2009 by carolesf.

Okay, you get the whole Lean Manufacturing thing.  But what the heck is Lean Office? 

The Lean Office Concept

Lean Manufacturing is starting to make sense to you.  Though a part of you really wants to hang onto that safety margin of inventory “just in case,” your data-driven brain accepts that Inventory Equals Waste.  Fine.  You understand the value of Lean Thinking as it relates directly to what you sell, even if that’s a service and not a widget.

But can you really apply Lean Thinking to your company’s administrative functions?  HR?  Accounts Payable?  IT? 

None of these departments are directly related to producing what your customers want to buy, yet it’s difficult to imagine how a modern company could operate without them.  It’s even more challenging to imagine how to observe, map, and quantify the value streams associated with them.  And changing these departments will be more difficult still, since these areas are even more strongly influenced by local company culture and “the human factor” than is the manufacturing environment.

So how does Lean Office work?  First of all, let’s be clear that Lean Office is not about cutting people or departments.  It’s about getting the most value out of the people and departments you have. 

The main idea is the same as in all Lean efforts:  Cutting out wasted effort or time. 

In the office environment, that could be the time files or other work items spend sitting around waiting for someone to work on them.  That’s the entire process of getting useless rubber-stamp signatures for some routine purchase.  It’s having a staff meeting on Wednesday mornings just because there’s always been a staff meeting on Wednesday mornings — even though half the time no agenda is prepared, the boss is late, and there aren’t even any doughnuts. 

Lean Office follows the same principles as Lean Manufacturing, but you may have to get a little creative to figure out what some of these terms mean in the office environment.

For instance, in an Accounts Payable office, the “customer” could actually be seen as the supplier who is waiting to be paid, the “product” is invoices, and the goal of “going Lean” would be to reduce the number of days an invoice goes unpaid. 

In an HR department, the “customers” are other departments internal to the company; the “product” is willing and qualified workers; and the metric for success of your Lean efforts might be to reduce the number of days an open position goes unfilled.

To succeed at Lean Office, you need to map the current process in terms of flow.  How does paper flow (or the equivalent in electronic forms)?   How does information flow, and is it the same as the paper flow or not?  (If not, think hard about the value of some of those forms.)  Map the value-add and non-value-add costs. 

Once again, the Lean principles are:

(1) Specify value — as the customer sees it, however the customer is defined for your function.

(2) Map the value stream, identifying value-add and non-value-add costs — and minimize the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Don’t do work until someone has asked for it.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

Now look around your workspace.  Can you put your hands on any piece of information you need in under one minute?  Could somebody else walking into your office find the needed info in under one minute if you weren’t there?  

If not, then we apply the 5S process to HQ: Sort, Straighten, Sweep, Standardize, and Sustain.  The goal is, “A place for everything and everything in its place.”  

The fact is, if you’ve already achieved Lean production (whether of a service or a widget), there’s no need to let flabby practices in the office keep you from world domination.  You owe it to yourself to give Lean Office your best shot.

Welcome back to Lean Six Sigma Source! Thanks for your continued support.

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Lean Manufacturing: No Muss, No Fuss

Posted on26. Apr, 2009 by carolesf.

What is Lean Manufacturing all about?   (We’ll get to the closet later.) 

Lean Manufacturing

is one of several related terms that describe similar systems.  Just-In-Time, World Class Manufacturing, Stockless Production, and Demand Flow Technology are a few of these other terms.  Broadly, all of these concepts focus on doing the bare minimum necessary to produce the product required by customers. 

In other words, don’t order extra inventory and then have to pay for facilities to store it and people to manage it.  Don’t over-design a product and spend countless engineering and design hours figuring out how to shoehorn 10 pounds of sand into a 5-pound bag.  (All the customer wants is 5 pounds, and they won’t pay more for 10.)  These things are wasteful.  The customer won’t pay for them; why should your company? 

Lean Manufacturing had its roots in Henry Ford’s system of mass production.  Ford was one of the first and most famous industrialists who paid careful attention to work flow and process standardization.  Before Ford, automobiles were an extreme luxury, since it cost so much for craftsmen to produce each one by hand.  Ford’s express goal was to create a market for the automobile.  He achieved this by reducing per-unit production costs and paying his factory workers enough so that they could afford to buy the cars they were building.  It worked.  America’s love affair with the automobile was born.

After World War II, Japanese auto producer Toyota admired the American system of production.  But Toyota’s leadership realized they did not have the capital or other resources needed to implement a process as centralized as Ford’s.  So Toyota set about trying to streamline everything related to producing cars.  The result was a system that became famous in the early 1990′s, in part as a result of a book entitled “The Machine That Changed the World” by James Womack, Daniel Jones, and Daniel Roos. 

So what are these revolutionary principles?    

(1) Specify value — as the customer sees it.

(2) Map the value stream, identifying value-add and non-value-add costs — and get rid of the latter.

(3) Make the remaining process steps flow.  This usually means empowering the workforce, pushing down responsibility for a decision to the right level in the organization.

(4) Let the customer pull the desired product through the production process.  Never build in advance of an order.

(5) And finally, don’t stop there.  Pursue perfection through continual improvement.  In other words, the job is never done.

In order for your production facility to support this approach, it is often the case that the physical plant must be transformed.  Lean Manufacturing prescribes the Five S process to achieve this: Sort, Straighten, Sweep, Standardize, and Sustain.  These actions can be taken in relation to the inventory but also to tools and equipment.  The goal is that age-old saying, “A place for everything and everything in its place.”  If you don’t need it — don’t hang onto it.  If you do need it, make sure you know where it is, and whether or not it’s in working order. 

So, what about that closet?  Well, the first three S’s are accomplished fairly easily, often in one major effort — like spring-cleaning a closet.  But without the last two S’s, it doesn’t take much time before things start to look like the same cluttered mess they were before.  Do you already have a stock of Widget A?  They didn’t get put where they were supposed to be, and something else got put there instead, so you don’t know.  Well, you need Widget A to produce your output, so you order more.  Bingo!  Wasted inventory, wasted time, wasted money. 

Lean Manufacturing requires constant discipline to avoid slipping back into pre-lean, wasteful habits.  The price of Lean is constant vigilance.  But if you’re successful in maintaining that vigilance — you can be a world-beater.

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