Is your organization in crisis management mode more often than you care to admit? Do you find yourself solving the same problems over and over again without getting better results?
Achieving measurable breakthroughs in operational performance is accomplished by delivering superior products and processes in the eyes of your external and internal customers at the lowest possible cost. One of the most powerful approaches that has been successfully employed by most larger companies is Lean. Although Lean originated with Toyota and was initially embraced by other Fortune 1000 companies, it is now being adapted by the most progressive small to medium sized organizations, and they are reaping big productivity and quality gains from it.
Lean Is for Both Manufacturing and Service Companies
Lean was originally employed on the manufacturing floor, but in recent years, numerous companies have found that Lean approaches are ideal for streamlining service and office operations. In fact, the opportunity for breakthrough operational improvement is often bigger in services and back office operations than in manufacturing. Other applications of Lean include engineering design and releases, order entry, production planning, purchasing, order fulfillment, receiving, packaging, shipping, invoicing, accounts receivable, customer and technical service, and even human resources. Wouldn’t it be an advantage to your company if all of these processes were faster, mistake-proof and less costly?
At its heart, Lean focuses on the removal of waste from your operations. This is accomplished by identifying and removing bottlenecks and non-value added steps, converting from batch to a more continuous flow of work, and eliminating sources of mistakes and defects in products and services. This improves quality, reduces lead times, lowers total costs, and increases cash flow.
The eight most common areas of waste include the following:
Best practice companies in Lean techniques have shown that success is dependent on three key factors: Lean leadership, customer focus, and Lean action learning.
Lean Leadership
In order to achieve real sustainable improvements over time, companies need a cohesive vision and strategy. This can be accomplished by creating a Lean committee of upper management members who oversee all operational improvement initiatives. A Lean committee will prioritize the improvement opportunities and select team members from across the organization to implement Lean in targeted areas. Within the committee there should also be a Lean champion who coordinates and drives the continuous improvement efforts of the organization.
Major organizational change cannot be delegated—and Lean represents revolutionary new ways of thinking about the business. Senior leaders must be willing to invest in their own learning, to roll up their sleeves and lead by example.
Customer Focus
Everyone should be focused on creating value for their customers, both internal and external. Every employee needs to know who the company’s customers are and how they use the company’s products. They should also know who their internal customers are and how they will use the output produced for that customer. For example, engineering creates drawings that are used by manufacturing to build the product, so manufacturing is engineering’s customer. If you listen deeply to the voice of the customer, you can define the value that your external and internal customers want. By building positive collaborative relationships with customers, you will be better prepared to identify barriers to customer satisfaction and eliminate them.
Lean Action Learning
There are literally dozens of Lean tools available to help you make desired improvements. Generally, companies work with an outside consultant to train improvement teams by using an action learning approach that enables the teams to apply the tools in real time on their improvement challenge. Improvement teams start by measuring and mapping the current value streams to show how people, material and information flow in the processes. The teams will redesign the processes by preparing future state value stream maps and applying the appropriate Lean tools.
The teams will identify and eliminate waste in the new processes, document those processes, educate all employees through visual signboards and other internal communication mechanisms, and measure the improvements.
Rapid Deployment through Kaizen Events
The Japanese definition of kaizen is to take something apart and put it back together in a better way. What is usually taken apart is a process, system, product or service. Rapid deployment of Lean techniques is often done in a Kaizen Event or as it is often called, a Kaizen Blitz. This is an intensive, high-energy, fast-paced, non-stop attack on a process. You form a team that targets an area, and the team applies the appropriate Lean techniques to change the process, measure the results, and report back to management—in two to five days, depending on the comprehensiveness of the change. Improvements typically don’t require capital expenditures, people get energized, and results are immediate. Gradually, over time, with enough kaizen events under your belt, your managers and employees will have the knowledge, commitment and ability to make continuous improvement part of the culture on an ongoing basis.
Lean techniques can eliminate waste, speed up processes, and provide quick results. But when more quantitative tools and considerable data are needed to reduce variation and defects, the best approach is to employ Six Sigma. Its five-step problem solving process, and the Design for Six Sigma approach (for developing new products or services) is unbeatable. Leading companies have married Lean and Six Sigma into Lean Six Sigma, which employs the best combination of tools for each of your processes.
Lean by itself, Six Sigma by itself, or the combination of the two can be your path to dramatically increasing your top and bottom lines. Select the best approach for your organization and achieve strategic and operational excellence.
For information on Six Sigma, refer to Jim Bandrowski’s article in this Resources section entitledSix Sigma--Not Just for Large Companies.