This a an article I co-wrote with my colleague Steve Halpin of ETAC Solutions (He is a Lean Guru and it’s a privilege to work along with him on a number of Lean programmes running currently) We wanted to create a short simple piece, as many are confused by what Lean really is. We hope you enjoy!
What is Lean Thinking?
Many service based companies are looking to improve their business processes, and bring efficiency and structure to their organisations. However, many do not associate LEAN thinking and principles to improving their processes. After all Lean is for Manufacturing companies…isn’t it??
The word Lean was used by James Womack to describe what was found in a study of automotive companies in 1989. Despite the fact that Womack has since gone on to outline Lean practices in non-manufacturing sectors, the initial link with production remains to this day.
Ask 10 people what they mean by the term Lean and you will most likely get 10 different answers. Some view Lean as a relentless cutting of costs and understandably this view attracts few willing participants.
We prefer to think of Lean as described by Deming back in the 1950s. Deming stated: “If you can’t describe what you are doing as a process, then you don’t know what you are doing”. This may be a little harsh and could be re-phrased “If you can’t describe what you are doing as a process, then each time it is done, it may be done differently. It is also likely that each client may have a different experience of your process”.
More and more service businesses and those in the SME sector are applying this view of Lean and process thinking, understanding the concepts of added value and rapidly increasing productivity and profitability. Happier employees are being engaged and suggesting ways of working smarter and this in turn delivers better client experiences and a better bottom line. What has happened in many of the businesses we have worked with has supported and gone beyond our initial hopes, Lean thinking really does work!
Some successes include:
– improved sales strategy and cycle; reducing ‘win’ time and increasing sales
– marketing (including digital) efficiency feeding from sales, customer care and support
– radical reduction on energy spend
– standardisation of quotation process
– streamlined purchasing process
– standardised legal processes
– increased internal communications, reducing duplications in work etc
– reduction in administration time for the financial month end process
– reducing costs dramatically by integrating systems (eg: Website, CRM, ERP, Finance, Project Management Systems)
To see organisations successfully apply lean principles in a retail pharmacy chain, a leasing business, a health and wellness company, a publishing and media group, a recruitment agency, an engineering firm, a not for profit, an administration office, a high street retailer and even a legal practice dispels the myth that Lean is only for manufacturing.
Our belief is that the expertise to develop business processes already exists in each business – it lies with those that deliver the processes every day. Lean thinking provides a structure to express what is done as a process and a set of principles and tools to improve that process. This empowers the employees in organisations to express potential improvements in a blame-free and data-based learning environment. We then support them to ensure they select the most efficient, relevant internal systems and tools (such as, CRM, ERP, Project management, Finance package etc) that talk to each other and are within budget, to create the best processes and structure possible.
Lean is a methodology to develop staff and promote a culture of problem-solving and continuous improvement in ANY business.