LEAN Transformations for Any Business Process: Achieving process improvement in both office and manufacturing environments
The concept of LEAN has been around since the inception of the Toyota Production System decades ago. Its fundamental tenet is the elimination of waste, which results in improved quality, lower cost, faster delivery times, and ultimately greater customer satisfaction.
LEAN is frequently associated with manufacturing processes. However, the same concepts and approaches can be applied to office processes, or any business process for that matter. The results achieved should rival those of a manufacturing process.
Here’s an example of a LEAN transformation in an office environment for a manufacturer: Its finance department was enduring a month-end closing process of nine days. This required several people working both days of the bordering weekends, as well as 10- to 12-hour days of the five days in between. The problems included high overtime, excessive stress, low morale, and failing to meet the parent company’s five-day mandate for completion of the close process and reporting of results. Action had to be taken to lessen this office “delivery” time, which is what it would be called in a manufacturing environment.
Pragmatek consultants first met with all team members involved in the close process, who were asked to document every minute of their day during the close. This included perceived value-add time (tasks) and interruptions or other duties not related to close (queue or delay time). Additionally, they were asked what information they needed (“inputs”) and where the results of each task went (“outputs.”)
After the close was completed, the team met in several sessions and explored each member’s submittals in great detail. All team members were encouraged to challenge why the task was being performed, why it was done in the manner it was, to the level of detail it was, and if the task or outputs were even necessary or providing value. Constraints and causes of delays were also determined.
The results of this effort showed numerous tasks were either unnecessary (waste) or could be reduced in duration since the accuracy required was not as great as believed. The client met the five-day window the very next closing period, and continues to examine the process for further improvement.
In our next blog about LEAN, look for three keys for rethinking LEAN in mid-sized businesses and case study examples of its use in the manufacturing environment to increase productivity and reduce costs. Click here to read “Improve Your Business” by Tim Allen.