Lean Thinking is about creating value and eliminating waste in order to reduce costs and improve efficiency productivity and quality. In this article, we will introduce you to the principles of Lean Thinking and shows how you can apply them in your work.
What IS Lean? In a nutshell Lean is a way of looking at how we do things and removing as much waste as possible so the end customer gets the most value. When we remove waste we don’t necessarily just “throw things away ” we can take resources that aren’t adding value in one place and use them somewhere else where they do add value. While the goal is to reduce waste and create the most value for the customer. Lean also makes things better for employees and the organisation.
Lean actually started a hundred years ago at the Ford Motor Company. It’s been in the mainstream for about sixty years now most notably for the Toyota Production System. Over the last twenty-five years Lean has been adapted to the office environment – and has proven successful in all sectors of business.
When applied correctly, lean thinking can: Increase the efficiency effectiveness and quality of our processes – which makes us faster at what we do and reduces our errors. Lean can also lower our operating costs – as processes become more efficient we free up resources that can be used somewhere else. As we make processes better our customers will spend less time navigating them leading to improved customer satisfaction.
Lean also improves employee satisfaction and morale. It’s a model that empowers you – the employee – to make your processes better. You know your processes and you know best how they can be improved. Greater efficiencies also free employees up to put their time and energy into other work.
In addition to focusing on value for customers, lean also emphasises that it is about the process, and not the people. It is all about respect for people and teamwork, and lean supports a continuous improvement cycle so it’s consistent with how organisations approach quality. Lean is about incremental improvement, that is, improvements of 30% now, rather than of 100% later or never.
We know from business intelligence, that by the time we’ve perfectly planned a 100% improvement, we understand that we’ve lost valuable time and the business environment will have changed. So now we will dive into the details of applying lean thinking, however first let’s get an important point clear, and that is lean is about getting rid of wasteful steps in a process or in how we approach our work; it is not about eliminating jobs or devaluing what people do.
So when wasteful steps are removed from a process, this in turn frees up people to focus their efforts, talent and time on other quality work. Now we all understand that lean thinking is looking at a process and removing as much waste as possible from it, so that the end customer gets the most value.
To get a better understanding of what this means let’s define these three key terms:
- value, and;
The customer is the person at the very end of the line who gets the thing we’re creating or the service we’re providing.
The value is determined from the point of view of the customer – a step in the process adds value only to the extent that it adds value for the customer, and we’ll talk about how to determine this in a moment.
The waste is the parts of the process that don’t add value for the customer. Those are the steps we’re trying to eliminate through this lean process.
Firstly, it’s critical to define who the customer is since that’s the starting point for figuring out what’s waste and what is value. For example, when someone applies for a business license and goes through the licensing process that person is the customer. An employee who goes through the process of requesting leave is also a customer.
Sometimes it can be tricky to figure out who your customer really is…have those conversations with your team and get clear about it. One point to note: the customer is not the next person in the process who you’re handing something off to. Okay so how do we determine if something adds value for the customer? Lean offers three criteria that all must be met for a step to add value.
The customer must care about it or be affected by it. It must change the product or service and it must be done right the first time. So for each step in the process test it against those three criteria. Does the customer care about it or is she affected by it? Does this step change the product or service? Was it done right the first time?
If something has to be reworked it doesn’t add value. Yes on all three counts? Then this step adds value and stays part of the process. Now go to the next step and ask the same three questions. If the answer is “no” to even one of the questions that step doesn’t add value and is considered waste.
As we’ve discussed the aim is to eliminate as much waste from the process as possible. And in many cases a step deemed waste will be removed from that process. However, sometimes we need to keep a step even if doesn’t add value.
For example there may be a step that involves approval from a higher-level manager. This step might not meet the three criteria for adding value however it’s a step we may have to keep in the process. It’s still important to weigh each step against the value criteria and when we find one of these exceptions examine it very thoughtfully before we keep it in the process.
After you’ve gone through an entire process you’ll have put each step in one of three categories:
- Steps that definitely add value – which we keep and aim to make even better
- Steps that create no value however that are still necessary for the organisation – which we try to reduce and
- Steps that add no value and aren’t necessary – which we consider for elimination.
In a given service process typically only 5% of the steps add value for the customer. The rest of the steps are non-value added. After categorising the steps, we try to remove the steps that don’t add value and aren’t necessary, removing as much waste as possible so the end customer gets the most value. While removing all waste from a process isn’t likely, the goal is to end up with a process that accomplishes what’s needed with the least amount of waste.
If you’re stuck on a step ask yourself: Is my customer willing to pay for this step? In addition to identifying steps in a process that don’t add value Lean also aims to eliminate other kinds of waste…the things that add problems or block the flow through a process. First let’s look at the kind of waste we encounter in an office environment.
The Lean Office categorises four types of office waste: information process physical environment and people. When you examine your processes look for these types of waste. They signal inefficiency and an opportunity to do things better faster or cheaper. Information waste includes redundant input and output of data Incompatible information systems, manual checking of data that has been entered electronically or data that’s input however never used.
It could also include re-entering data and converting formats, let’s say taking an Excel file and copying and pasting the content into Word Unnecessary data Unavailable data or data that is missing or unknown.
Some examples of Process Waste are: Defects scrap or reworks Workarounds Inspecting checking and double checking Approvals… though not all approvals are waste. For example if they’re done at the wrong level or are redundant they’re waste.
Ask who is the right person to approve this? Times when there’s too much work and times when there is not enough…this relates to flow which we’ll talk about soon Too much inventory for example having extra letterhead that has become outdated. Overproduction Waiting and Over processing.
Waste in the physical environment is waste that’s related to the inefficient movement of people or objects, such as having to travel to another office location for a meeting, or having to go to your division’s office supply person to get a replacement pencil.
The fourth kind of office waste is people waste. We’re not talking about people as waste, rather that we are wasting important aspects of people, for example having unclear roles, lack of training, or not using someone’s talent to the fullest.
Hierarchy and structure…for example hierarchy or structure that blocks the flow of ideas work documents and decisions. Hiring mistakes Lack of strategic focus and Handoffs.
Handoffs are when work is passed from one person to another person. Often handoffs require mental reshuffling of tasks and work. The goal? Eliminate the handoff and finish the work. The bottom line is that waste can be hard to see in an office. You might “feel” it before you actually see it. Hopefully it will be easier for you to see it after hearing about the four types of office waste, and you’re building a habit of looking for it.
In the last section we mentioned waste that blocks the flow through a process. Imagine a nice clean process that’s had all the non-value added steps removed. Each remaining step creates value for the customer.
But…when something moves through that process it doesn’t flow evenly – it starts and
stops. Fred finishes his part and passes it up the stream to Sarah however she’s got a desk full of assignments and can’t get to her part for a couple of days. Even though all the steps add value the process flow is blocked, and we’re still not getting ideal efficiency.
There are typically two types of flow: Batch processing and single-item flow. An example of batching is waiting until 10a.m. to process all forms from the last 24 hours…or waiting for 500 forms before entering the information into a database.
If you wait for 500 forms this bottleneck might seem familiar to you. Waiting for a response to your email might feel like this. Single-item flow or Lean flow is processing things one at a time. With Lean we’re trying to create a flow in which the product or service moves quickly and continuously through the system.
The way to get this type of flow is to use “pull” versus “push”… Push is handing off work to the next person in the process before they’re ready for it. Pull is when the next person in the process is ready and “pulls” the work from the last person.
The key to a “pull system” is that nobody upstream produces a good or service until the next person in the process is ready for it. Okay we’ve covered quite a few concepts around what is lean thinking. Let’s do a quick recap.
Lean thinking aims to reduce as much waste as possible creating the most value for our end customer. We do this by eliminating or reducing process steps that don’t add value eliminating other types of waste in the office that cause problems or block the flow of the process and by using a “pull” system that keeps things moving quickly and continuously up the process stream.
Going beyond single process improvement projects a Lean culture of continuous improvement requires a shift in how leaders everybody thinks. Let’s walk through some of the differences between Lean management and traditional management. In a Lean organisation, leaders support simplified processes rather than complex processes. Leaders support pull systems not push systems. Leaders support minimal processing time for all processes including their own.
So when you ask yourself what is lean thinking, remember that leaders support quality built into the system instead of quality inspected in. Leaders ask questions to help employees answer their own process issues rather than giving answers.