LEAN is a set of principles, operational practices and problem solving techniques that when used together help an enterprise do “more with less”. LEAN enhances the value of products and services to customers, delivers it faster and at lower cost. LEAN is counter-intuitive in its operational practices and is a paradigm shift from other business process improvement or problem solving approaches.
It is believed that as much as 40% to 95% of an enterprise’s activities may be wasteful and it is this waste that is targeted for elimination in LEAN. LEAN Management engages front-line workers and provides them the tools needed to eliminate wasteful activity; thereby increasing productivity. When LEAN is used as an operational excellence strategy it has increased productivity by 10 to 300% in conjunction with reduction in operating cost by 10% to 35% in less than a year.
Over the last 50 years LEAN has established itself as a system of management. With increasing application in industries other than manufacturing such as Healthcare, Public Services, Operations & Maintenance and Construction, it is fair to say that LEAN is here to stay and beyond a “fad”. Along with the continual elimination of waste, the aspect of “respect for people” is a central tenet of LEAN. This is reflected in better quality of work, improved problem solving, higher levels of empowerment and employees being fully expressed. The LEAN workplace is intended to be engaging, collaborative, interesting, creative and fun. LEAN favours rewarding employees for team/collective performance and opposes practices aimed at reducing cost through lay-offs. LEAN enterprises tend to redeploy released manpower & talent into new services, new lines of revenue or in enhanced services levels.
While LEAN is usually practiced using a “waste first” approach which seems to suit our western way of thinking, the Toyota Way (LEAN as practiced in automaker Toyota) is grounded in good systems theory and based on Systems Thinking. This approach determines where “the thing” (customers, transactions, products, patients) is not flowing smoothly, followed by a sharp focus on the “wastes” that are obstacles to flow. Empirical evidence collected till now suggests that this approach is better. It supports the strategic application of LEAN thinking and speedily eliminates wasteful use of vehicles, machines, spares, fuel, machine parts and raw material at the workplace.
The benefits to society from LEAN can be great. Our current economic woes can be attributed in part or entirely to overconsumption. LEAN is currently the only methodical approach that can reduce “overconsumption” and help restore the balance of output and resources – without disruption or shock to the socio-economic system.
Kaizen (“Change for good” in Japanese) is the aspect of continual Improvement at the workplace. Kaizen engages front line workers who “do the work” in improving flow and eliminating “waste”. Real continual improvement is not controlling performance or sustaining it, but action in response to increased market demand, new customer expectations and setting higher standards of service. This can be the source of competitive advantage or enable strategic transformation.
Anand Nicodemus – 19th October 2015