Becoming Lean – Reaping benefits of Lean Solutions : Management Funda; March'08

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Becoming Lean means eliminating waste at every product or service creation phase and becoming highly responsive to customer demand while producing quality products and services. For example the new car ‘Nano’ uses less steel, less plastic, less space and less energy to run. People love it and there is already a huge demand for it. This definitely makes the car ‘Lean’.

 

Origin of Lean
Lean was born with the Toyota Production System a manufacturing methodology developed originally by Taichi Ohno for the manufacture of automobiles at Toyota. Its goal was "to get the right things to the right place at the right time, the first time, while minimizing waste and being open to change". During the 1980s, Lean production was adopted by many U.S. and European manufacturing plants. It has also been implemented with success by service organizations, logistics and supply chain organizations.

Implementing Lean
The following steps need to be followed:-

  • Define who are the customers

  • Define desired outputs and value in customer terms

  • Define current process as it really is, not as it is supposed to be

  • Identify and eliminate waste (non value adding steps) ie., all steps should directly contribute to satisfying customer need

  • Make the process flow so the customer can ‘pull’ (i.e. demand from the customer)

Types of waste in Service context
Now, let’s move away from Production environment and see what resources typically a service company wastes.

Points to remember while implementing Lean:

  • The focus of Lean initiative is on delivering continuous improvement and a mix of long term as well as short term improvements.

  • Ever heard of continuous improvement taking place in the absence of measurements? So, a regular measurement of improvements is important.

  • Kaizan, Just In Time, Six Sigma, process reengineering etc are some of the Lean tools. But unless you know what you want to achieve using the tools, the tools are useless. It’s like giving a cook lot of ingredients without telling him what needs to be cooked. Thus it is necessary to have a clear vision of your organizational objectives before you choose your Lean tools.

  • A holistic approach is the key to making Lean work. Every one who is involved in providing the service needs to understand what and how they are delivering to the customer and how they can eliminate the waste from their actions.

  • While the principles of Lean are common for all organizations, the way it gets implemented will differ from company to company.

 

Examples of benefits that you will enjoy

  • Operational excellence: Companies such as ICICI Bank and Wipro have been successfully using Lean for driving this.

  • Flexibility to meet varied customer demands: By reducing production system response time Toyota was able to quickly change and adapt to market demands.

  • Minimised costs: Dell implemented Lean to remain profitable by minimizing costs.

  • Better service: By combining Agent-assisted Voice Solutions and Lean's waste reduction practices, a call centre company reduced handling time, between agent variability and accent barriers to improve live agent call handling.

  • Better price realization: General Cable achieved this from ‘Lean’ initiatives.

  • Competitiveness: Lean manufacturing reduced lead time, reduced costs and improved quality providing opportunities for new marketing campaigns, allowing companies to gain market share from competitors that were slower, costlier or of poorer quality.

 

Conclusion
Can you ever say you have done all that is required to become ‘Lean’? Well, can you ever say that my customer will always be happy with my current level of service or that there are no more ways I can improve my processes? No! Since becoming ‘Lean’ is a continuous process and to bring about meaningful results Lean management needs to be sustained over a period of time. Regardless of the industry, company size or culture, the Lean concept can be used to provide value to your company and yourself.

References

  • Malloy, J, “Lean production”, http://searchcio.techtarget.com/sDefinition/0,,sid182_gci810519,00.html.
  • “Leading In Lean Time”’, http://www.themanagementor.com/EnlightenmentorAreas/sm/MS/Leanlead.htm.
  • Kumar, V. R, “Just get Lean and mean”,http://www.thehindubusinessline.com/ew/2005/01/17/stories/2005011700180300.htm.
  • Sarkar ,D,  “ ‘Lean’ is more than a cost-cutting tool”, http://www.thehindubusinessline.com/2008/02/14/stories/2008021450240900.htm.
  • “Lean manufacturing”, http://en.wikipedia.org/wiki/Lean_manufacturing.
  • ‘Lean Process Improvement - effective organizational improvement though your people’ pdf document.