For many people the notion of “the lean enterprise” conjures up thoughts of downsizing, cost reduction and getting rid of the fat. This is in reality a misconception promulgated by the spin of public relations folks disguising the bad news of layoff actions as positive news.
This is an unfortunate perception. The true and truly beneficial nature of bringing lean into the organization has far more to do with making the enterprise responsive to the customer. Through that transformational process the enterprise is actually fostering growth, increasing market share and delivering higher margins.
At the heart of any lean enterprise initiative is the necessity of eliminating those practices that do not delivery added value to the customer. Frequently we have trouble doing this. Our days at work are consumed with assorted activities, many of which approach behaviors better characterized are ritualistic versus productive.
What this means is we are frequently doing things for no real reason other than the fact that we’ve always done them in the past. We create reports, we attend recurring meetings, we participate in workflow events “approving” or passing along tasks and forms to others in the organization. We do these things automatically never questioning if our participation is actually delivering any positive benefit to the organization.
The task of bringing lean into the organization is to identify all of those processes, activities and actions and getting rid of the superfluous, the unnecessary and the redundant. How is this done? How do you get started? What are reasonable goals?
Richard MacInnes, in his book “The Lean Enterprise Memory Jogger” identifies four main goals that should drive the lean initiative. His four points are
- Improve Quality
- Eliminate Waste
- Reduce Lead Times
- Reduce Total Costs
The point is that the elimination of waste is essential to the success of the program. The other three points are also critical, but today let’s confine our discussion to elimination of waste. The elimination of waste will indeed help accomplish the other three goals.
MacInnes recommends starting at the end, rather than the beginning in the process. He would council us to imagine the “perfect” operation. What would it look like? He describes the perfect operation as being customer or demand driven, only producing product that is ordered by the customer. This allows the enterprise to deliver instantly since their capacity is only utilized for actual, ordered product. This also eliminates inventory. Finally there are zero product defects.
This is a high bar to aspire to, but, none the less, this is the destination you really want to arrive at. Once you begin to look at your own organization through the lens of this “perfect” operation, waste opportunities will begin to become more and more obvious.
The classic lean enterprise or Toyota Production System typically names seven specific type of waste to look for. Chief among these waste types is the Waste of Over-Production. Attacking Over-Production first has the added advantage of helping you locate other wastes and also it is no unusual for this to represent the largest and most fertile area for potential green dollar savings.
The other waste categories can be rich in potential as well. Briefly, here is an explanation of each:
Transport – This occurs when internal processes or physical issues force the unnecessary movement of work in progress (WIP) within the organization. Movement of WIP from a processing station to a holding area and then moving it again to a down-line processing station exemplifies this. The product has to be moved at least once unnecessarily.
Waiting – When the WIP is sitting in the holding area, between moves, the waste of waiting occurs. WIP is produced and then it sits. It can’t be sold or used; it just sits there sucking up money.
Motion – The waste of Motion is similar to Transport, but it can occur on a much smaller scale. The individual working at a station along the assembly line can collectively waste a huge amount of time by simply including extraneous motions and movement into their activities.
Inventory – This is always an easy place to see room for improvement. The expense associated with producing and then storing product is astronomical. Building to deliver is much better for planning and for minimizing costs.
Defects – Quality should be job one for everybody. When you eliminate defects you eliminate the need to remanufacture or pay for the same ground twice.
Extra processing – It’s always tempting to move things down line even if they are not technically finished. The problem with this is that eventually, someone will have to spend cycles finishing the work started. Do right, do it completely and then move it down line.
That’s the basic plan for getting things off the ground with a waste elimination or lean initiative.
If you’ve been tasked to start something like this in your own organization or if you’re interested in initiating a program this is a good place to start. A couple of other things to remember are:
- Get management buy in and commitment
- Keep them posted, be you own little internal PR firm
- Establish metrics that all can see and use these to determine your weekly or monthly progress
- Get representation from across your organization on your team. Also, don’t just get managers and directors get some folks who work the lines and folks who know where the problems really are
Finally, I would heartily recommend getting some help. You are not alone, thousands of folks have done these things and you can learn from any of them.
- Look online at LinkedIn and other social sites with Special Interest Groups listed
- Check out the Lean Enterprise Institute
- Take a couple of courses or go to some seminars
- Grab a copy of The Lean Enterprise Memory Jogger by Richard L. Macinnes
Lean is a journey, it is not a destination and getting there is indeed half the fun.