What is Lean?
Our organization, Lean Advisors Inc., work with clients from a wide business spectrum including manufacturing, service, healthcare, education and government. In every case, we often hear, “Lean sounds good, but we are different.” Although every organization may be different in terms of what product or service they provide, our message is consistent. Lean is a customer centric philosophy designed to support organizations to better understand and meet the needs of their customers. Ultimate goal is to deliver the best product, with the highest quality and at least cost. This is non-negotiable.
The term Lean is probably one of the most misused terms, being used to describe every business process ‘improvement’ activity in the last 15-20 years. Lean is simply about creating more value for customers by eliminating activities that are considered waste. Any activity or process that consumes resources, adds cost or time without creating value becomes the target for elimination. Thus, Lean will work for any process or business that is looking to add value.
Different types of Waste exist in every company from the front office, to the production floor through to customer delivery. The easy part is to identify and classify the different types of waste. Knowing how to properly remove waste is much more challenging. Waste is actually a symptom of poor workplace organization and work flow.
One of the important aspects of Lean is the focus on ‘system-level’ improvements (versus ‘point improvements’). It’s the system-level work that can remove waste and dramatically improve an organization’s bottom line results.
System thinking is about optimizing the end to end processes within a organization from the initial order or sales contact through to scheduling, production, distribution and ultimate delivery to the customer. Often organizations exceed in some of these areas but very few actually look at the entire end to end process or Value Stream. Lean analysis through Value Stream Mapping often uncovers situations where one segment of the business or one process step is optimized at the expense of another business segment or process.
Lean is actually a common sense approach based on five fundamental principles:
- Define Value from the Customer Perspective
- Identify and understand the end to end Value Stream
- Make Value Flow within the end to end Value Stream
- Create Pull from the customer
- Strive for perfection
Where do we start?
One of the most common questions we are asked is – “Where do we start?” and “How do we do it the ‘right’ way?” The key to success is to have an effective plan specifically for your situation and environment. Without an effective plan, you will either fail totally or not maximize your potential. This is actually the toughest challenge for the senior leadership in any organization.
It is critical to introduce an integrated Lean Transformation. A three phase approach to adopting and applying Lean provides the best assurance to sustain your efforts over the long term and to embed Lean, creating a continuous improvement culture.
Phase 1- Strategic Planning
As organizations realize that they are at risk, they must begin to look for solutions. Current practices successfully brought companies to where they are today but unfortunately those same practices will not be enough for tomorrow. It is important for organizations to recognize the need for change and to begin a new journey to reinvent themselves. This does not mean you ignore your past but rather celebrate those successes and use them to leverage thinking to generate new solutions that can carry you into the future.
Leaders must be prepared to critically view the current situation from their clients perspective and to align their strategy/direction accordingly. Key metrics must be established to support and reinforce this new client-centric business perspective.
Phase 2- Developing the Plan
Developing the plan is actually applying the second principle of Lean. Enterprise Value Stream Mapping is a fundamental Lean tool that becomes the driver of change.
Enterprise Value Stream Mapping captures all activities along the entire Value Stream from customer order through to the production and delivery of the product or service. This tool provides us with the complete picture of the Current State and designs a more effective Future State; a vision of how we will organize work and processes with less waste. Enterprise Value Stream Mapping includes the information, communication and scheduling flows to help companies fully understand how each process step or activity connects and integrates (or not) from a system perspective.
A value stream is the set of all activities, from request to delivery, used to provide a product or service to clients. Understanding and improving processes as integrated end-to-end systems is fundamental to real and sustainable improvement. An Enterprise Value Stream Map comprises of 3 components:
- Current State Map – Visual representation of how work / product presently moves through the Value Stream.
- Future State Map – A 3-6 month visual representation of the vision, applying Lean Principles of Lean to design out waste.
- Implementation Plan – A documented plan outlining the Kaizens or Rapid Improvement Events necessary to transform The Value Stream from Current to Future State
Enterprise Value Stream Mapping takes the complexity of the end to end processes within a company and transforms it into a simple, visual document. This document is then used to analyze and develop the ‘right’ Future State Implementation Plan. It will have an accurate understanding of the ‘whole picture’ with identified changes creating ‘system’ improvements. Enterprise Value Stream Mapping is imperative for companies who want to have a clear and effective plan for change.
Phase 3 – Executing on the Plan
Executing the plan is the most critical phase for companies. This is the stage where real change must happen. It is important for the Senior Leadership to actively support and reinforce the need for change. Support involves a clear message that the Implementation Plan is not negotiable. The day to day issues although important cannot be an excuse. Time and resources must be allocated to support change. The status quo is not acceptable. New management performance measures developed in Phase 1 drive new management behavior to measure and reward action.
This action is in the form of structured rapid improvement events, commonly referred to as Kaizens. Kaizen is a combination of two Japanese words that simply means change for the better.
Kaizen Events move companies away from traditional lengthy projects where valuable resources spend more time in meeting rooms and completing updates than in making change happen. Kaizen Events are a focused approach that brings critical resources together and empowers participants to not only root cause and determine solutions but most importantly to implement change. Time and effort is spent to support the value stream, reinforce system thinking to create sustainable improvement. Kaizen is action focused!
The Lean journey requires real effort and a true customer centric commitment. It is not something that can be partially introduced. Through our experience, working with many clients from many different industries, it has been demonstrated that a structured plan is critical to any Lean implementation. The 3 – phase approach described above provides an excellent framework for companies to start their Lean journey.
Mike Boucher Bio
Vice President Client Services
Mike has had extensive experience with Lean in his role leading companies in their Continuous Improvement and Lean journey. Over 20 years, he held numerous operational positions with a major distribution and logistics corporation.
Mike has had the opportunity to experience production and operational issues that are common to all organizations and companies. He has dealt with the seemingly conflicting objectives to exceed customer expectations, while maintaining the highest level of quality at the lowest possible cost. The combination of hands-on experience and theoretical knowledge of Lean has made him an authority and an accomplished advisor.