Topic Expert: Drew Locher, Change Management Associates
James Womack and Daniel Jones in their landmark book “Lean Thinking” identified three primary value streams that all companies are typically involved in, or at least some combination of the three.
- Physical Transformation (manufacturing companies)
- Problem Solving (engineering and design companies as well as many service organizations)
- Information Management (which most all companies are involved in to some degree)
The goal of an organization is to be a Lean Enterprise – to apply the common sense business practices embodied by Lean Thinking to all areas of a business. There are many well documented successes in manufacturing applications. However, service organizations and administrative processes within manufacturing companies have struggled with applying these concepts to the second and third primary value streams identified above.
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|Recommended BooksThe Complete Lean Enterprise
by Drew Locher
Implementing World Class Manufacturing, 2nd Edition
Often heard as a reason for this difficulty is that the nature of work performed in these two value streams is “different” – it is highly variable, and more “creative”. People then quickly discard Lean concepts as “not applicable”. However, this would be a critical mistake. What it does mean is that a deeper understanding of Lean is required by those who seek to implement the concepts within such organizations. Adaptation of the concepts is often required. Only with a deep understanding of the underlying principles can they be successfully implemented with confidence.
One of the breakthrough exercises – when people begin to see the application – is to identify “service families”. Here a team will identify the key services that are being delivered by a department or function.
They begin to see the “processes” that are being regularly performed, and realize that they are not adequately organized by service or process.
A highly revered ex-Toyota consultant has said that most manufacturers seem focused on achieving 35 to 40% productivity gain over three to five years.
He went on to say that they should be focusing on a 400% improvement in productivity over 10 years to achieve the path to becoming lean. Admittedly this is a lofty goal. However, manufacturers will not come anywhere close to the 400% figure if they solely focus on waste reduction in their production processes. Only by looking throughout the enterprise will organizations identify the untapped potential for improvement that will allow them to go well beyond the 35 to 40% figure.