What is Lean? Many times leaders can feel that their team members have plenty good ideas but lack focus, or that some processes feel too clunky and inefficient. Have you ever asked “There’s got to be a better way?” Or perhaps you’ve heard of Lean before and are starting to do some reading on the topic in order to learn ways to help your business. In this article we’ll be discussing the The Three Fundamental Keys of Lean, and how you can apply them to your business.
Lean is a business improvement methodology originally from the Toyota Production System but is applicable to all businesses and processes. The three fundamental of lean can be summarized in three key ideas:
The first fundamental key to Lean is Value. From the perspective of lean, value is defined by the customer. Asking the simple question “would my customer be willing to pay for this?” is an easy way to identify value. The goal of lean is to maximize value. This is done in combination with a number of activities:
- Identifying what the customer values. Ex. prompt service, a quality job at a fair price are all valued by your customers. These values are also fairly consistent with most lean organizations.
- Identify and streamline process flow.
- Identify and eliminate or reduce waste within the process.
The second fundamental key to lead is Flow. The process and process flow can be examined at a variety of levels and there are several lean tools that can be used to assist in this process. It is often advantageous and recommended to start at a very high level defining the 7 to 10 steps of your process (and then dig deeper into your problem spots, challenges or opportunities).
For example, if you’re in construction the detailed process flow would vary a lot from job to job but at the high level the activities would be fairly standard such as:
- Marketing and promotion
- Contracting and scheduling
- Pre-construction/design activities
- Payment and follow-up
Two tools that can assist in this analysis are SIPOC (Suppliers – Inputs – Process – Outputs – Customers) and Value Stream Mapping (VSM). The process steps outline above form the framework of both the SIPOC and VSM. From the Process, move outwards thinking about general inputs and outputs and finally customers and suppliers. These relationships can be examined to think about what’s working well and what can be improved upon. A traditional VSM would be a deeper dive that includes detailed metrics and provides the framework to look for potential waste within your process. As you look at the process steps, consider which ones are most critical to your overall success and which ones might be able to be passed along to others if the process were standardized and well documented.
Waste: The 8 Wastes of Lean:
The third fundamental key to lean is waste. Waste is basically any activity in your process that is not adding value. The elimination or reduction of waste will improve the process flow, increase the value to the customer and ultimately improve your overall productivity.
- Transportation: The movement of people, material and information both onto and off the job site.
- Unnecessary Inventory: Large inventories can result from overproduction but can also be a result of how we choose to operate. In addition to tying up capital, large inventories also lead to crowded workspaces and perhaps even additional expenses associated with storing and removing unused materials.
- Unnecessary Motion: Within a particular process step, movements that don’t directly add value are considered waste. This would include searching for tools, having to retrieve materials or excessive walking in order to perform the job.
- Waiting: Idle time that results from waiting for either materials, equipment or information is considered a waste.
- Overproduction: Overproduction is considered the biggest waste because it leads to several other wastes and ties up your capital. Overproduction means producing more than what is needed by the customer or a downstream operation. And in the construction example this would be closely tied to scheduling and making sure that the sequence of events within your process is not creating inefficiencies.
- Over-processing: Over-processing means using the wrong tools for the job or performing steps that are not valued by your customer. For instance, using a more complicated and elaborate tool or process than is required to properly perform a given operation is considered one example of over-processing.
- Defects: Reducing defects will reduce the amount of scrap and rework. In addition to spotting and correcting defects early in the process, it will be important to identify the source or root cause of these defects and work to correct it. Perhaps defects reflect a supplier quality issue or is a result of excessive movement or transportation in your process. Another consideration would be to standard processes and/or training help reduce defects.
- Skills: Skills wastes arise from under utilized abilities of your staff. It can result from poor communication, lack of teamwork and insufficient training.
If you are starting to see opportunities to improve your business, you’ve begun your Lean Journey! To learn more about how Lean can be applied to your organization, feel free to contact us for more information on our training and onsite workshops to bring this knowledge to your team members.