Lean Processes
In one Lean project in Distribution, lasting around twenty elapsed months, I achieved the following:
- A 25% reduction in required warehouse capacity ...
- ... this, just a year after more space (an extra 15%) had been being urgently sought
- an 80% reduction (over two years) in damaged and lost consignments
- Continuing savings, year-on-year, into millions of pounds
- Huge improvements in customer satisfaction
- Vastly reduced costs and higher profits
Lean
Lean is about achieving more and more, with less and less.
It’s an evolutionary process that feeds on itself and what it learns.
A crucial thing to be said about Lean is that it doesn’t only apply to manufacturing; to physically making things. Though it grew out of a model known as the Toyota Production System, Lean principles can — and should — be applied to almost any business process.
Any process can be efficient or inefficient. Inefficient processes waste time or materials or goodwill or anything else of value. Waste in the very broadest sense is such a fundamental aspect of Lean thinking that the Japanese translation ‘Mùda’ is still often used for it.
Mùda
Mùda is Bad.
Anything that wastes something of value is bad. And Lean goes on to tell us how we must assess ‘value’. It asserts that value or value-added only ‘counts’ when it’s value from the customer’s perspective. This gives licence to much important analysis that looks at all the paper-shifting and background noise that can go on in business and asks the stark question:
- Does this add value for the final Customer ?
Value Streams
Careful analysis of the value stream will start to identify three sorts of activities:
- Those that unambiguously add value
- Those that don’t add value, but are necessary to support ones that do (“Type-One Mùda”)
- Those that create no value at all (“Type-Two Mùda”)
At first glance, that seems simply to state the blindingly obvious. And to invite a swift follow-up question: "why on earth would anybody be doing anything that was so obviously adding no value to anyone, anywhere ?"
Slipping under the radar
Type-two Mùda slips under the radar because it still manages to appear to add value. That’s what makes analysis of value from the customer’s perspective essential.
Thinking back on many Lean projects that I have worked on, this sort of Mùda is usually being cloaked by processes that are explained by perfectly competent and engaged people in these ways (and these are real examples):
- “Finance need this, they do something with it at the end of the month”.
- “We have to re-check these, because each department only runs its own set of checks”.
- “If I came back as soon as the lorry was empty, I’d not be paid any overtime”.
- “If we don’t do that, we can’t close off the production run; it’s alright, they usually swap it back in the morning”.
- “The night shift just has to drop them off into bays: we just have to find the exact one when we ‘pick’ in the morning”.
- “Every ‘E’ and ‘T’ policy has to be passed up to Commutations. We’ve always done that”.
Flow
Flow is another essential ingredient in Lean processes.
It stands at odds with batch processing, which — since Adam Smith and his pin-manufacture insights — has always seemed to be only A Good Thing.
There’s a very good example of Flow that anyone can try out: an ideal time is in the early days of December. If you had a hundred sheets of card to sign, fold and post, most people would assume that doing all the folding, then doing the labelling, then the stamping would be most ‘efficient’ way to go about things.
But if you look at the journey from the card’s perspective, you see the process quite differently. Count the number of put-downs and pickups of paper, envelope, label and stamp book and you will rapidly see that doing one envelope at a time — start to finish — is the fastest way to do the job. Counter-intuitive, certainly, but true none-the-less.
But there’s more.
Quality is hugely improved, too. Focusing on one item at a time means that handling is minimized and focus on the specific letter means that quality-checks are intuitive. Think of the process of putting the right stamp on the right envelope: most will be of the same value; just a few will be for overseas. Breaking these out of the batch-inspired process will take time and add no value, but doing so would be essential to stop under-franked mail going to the USA, and not being delivered.
Quality is, of course, the key; because poor quality detracts from value. Another way in which Lean’s prescription of focus on the value-attracting unit (the letter in the above example) helps boost quality is through engagement.
With batch processing, there is no one group or individual who is wholly responsible for the finished product. With techniques that employ Flow properly, there is. And that is where Quality Circles, and continuous improvement, came from. Again, those principles are equally applicable outside of manufacturing, though it’s manufacturing that gave us the discipline to look at the world in a Lean way.
Pull
The concept of ‘Pull’ completes the Lean picture.
If a process pulls what resources it needs from up-stream processes, then it uses those resources as it needs them: there’s no need to hold stocks. If all parts of a process do the same, then there are no idle resources or “stocks” anywhere.
Failure of ‘pull’ is often the first — certainly the most conspicuous —indication of Mùda: in fact, in Lean, “Inventory” (= idle stock of stuff) is nearly as bad a concept as Mùda (‘waste’) itself.