The Lean business model is a recognised and proven path to better business benefits including: increased customer satisfaction, a motivated workforce and maximised profit.
A Lean organisation is one in which all processes link together in a seamless flow, to provide a value added service or product to the client or customer with minimum expense.
Lean business models require each part of the organisation to cooperate and coordinate as a single unit to provide the service or product and improve the processes that create it.
Implementing Lean involves implementing a new way of thinking to ensure excellent results.
Here are a few examples:
People: Most people are motivated by doing a good job, making a quality product or providing a top notch service. Given the right environment employees will achieve this efficiently and happily.
However, in the wrong environment, one where processes let employees down, there can be delays, downtime, incorrect information, poor planning and no involvement. Employees are unable to fulfil their goals and become frustrated, unhappy and inefficient.
To create a Lean organisation, Improvement Direct focuses on the process and not the person to improve performance.
We defect-proof the process by analysing the causes of frustrations and involve the key people who perform the tasks. This allows people to create input and take ownership of process changes and procedures making them motivated to maintain the new best practice
Communication: One of the most common complaints from people in non-lean organisations is that ‘communication is bad,’ and the quality and productivity results usually point to them being right.
In a Lean business, we structure communication into daily business. People come together to share specific information in efficient, standardised reviews that quickly share details and priorities, target mistakes and facilitate improvement action. Don’t wait for communication to happen by accident or expect it to improve because you asked your team to ‘communicate better’, talking about it may not help. Communication must be structured into daily activity and happen as routinely as work tasks.
Improvement activity: Many organisations struggle to get real momentum with a culture of improvement. Beginning with an improvement blitz in one week, organisation leaders are left wondering why the process falls back to the same old standards of disorder and waste the following month. Organisations default to repeating cycles of the improvement blitz without these changes becoming normal parts of the organisation’s culture.
To avoid the improvement blitz culture a Lean organisation builds improvements into daily, weekly and monthly routines. Improvement activity kicks in when a problem occurs during normal work and is visible in the end-of-shift procedure or in a standardised meeting agenda. Improvement activity must happen alongside work.
Waste reduction: In a non-Lean organisation, waste is measured as a by-product (off-cuts, scrap, etc.) and is seen as the cost of doing business. As long as the ratio of waste is low relative to profit, waste will not necessarily become an important focus for business managers and may continue to erode profit and the planet.
A Lean organisation targets nine specific types of waste with an eye to reducing them all:
INVENTORY: Having too much stock, consumables or materials on hand adds cost in value, handling, storage, obsolescence
WAITING: Waiting for information, materials or consumables causes costly delays
TRANSPORTATION: Excessive movement of goods through poor layout
MOTION: Excessive walking through poorly set up work stations
PROCESSING: Doing more than the customer really wants
REWORK: Repairs, touch ups, double handling
OVERPRODUCTION: Producing more than required, just in case, working ahead
WORK IMBALANCE: Peaks and troughs in work-loads, skills
RESOURCES: Fuels, energies, water usage and inputs such as plastics and other non-degradable materials. This includes wasted output, such as by-products, heading to land fill.
In a Lean organisation all employees are trained to identify the nine forms of waste and feed their ideas and suggestions into the daily communication or improvement structure. Organisational awareness of waste will lead to a focus on waste reduction and therefore contribute to a more sustainable organisation.
Sustainability is the new safety in terms of staff engagement and motivation. A clever organisation uses this motivation as another footing to climb the continuous improvement mountain with benefits for people, planet and profit.
Peter Maunder, Managing Director of Improvement Direct Ltd, has a broad base of business experience including being a 15 year veteran of Toyota Motor Company in New Zealand….still recognised as New Zealand’s best Lean business example. He has delivered Lean Enterprise Training and coaching services to more than 50 client companies over the past 15 years. Peter has presented Total Quality Management workshops at Auckland, Waikato and Massey universities.
Improvement Direct is an approved service provider through the New Zealand Trade and Enterprise Accelerate Success programme and is a member of the Sustainable Business Network.