Bringing ‘Lean’ Principles to Service Industries — HBS Working Knowledge

Link: Bringing ‘Lean’ Principles to Service Industries — HBS Working Knowledge.

In his book "The Machine That Changed the World," Jim Womack, et al. discusses the inception of "Toyota Production System," eventually to become known as lean manufacturing.

The basic concept is simple (ok, for all you lean experts, I know this is an oversimplification, but give me a break), figure out how long it would take to make something and how much material is needed, if everything went according to plan; no delays in assembly, no part shortages, no rework, and so forth. Whatever happens to make that ideal time take longer and use more material is called waste (or muda in Japanese). For example, if I’m making a red Swingline stapler, and I can’t finish an order for a customer because either the red plastic housings were late, or I had to pay an expedite charge to get them on time, or I had to throw a bunch of them out because I ran over them with a forklift, all of that is considered waste.

Waste in a process, any process, is bad; it doesn’t contribute in the least adding any type of value to the thing you’re making. Waste is also inevitable; you simply can’t get around it. So, the basic notion of lean manufacturing is to remove as much waste from a process as is possible. It’s a balancing act, between capacity, quality, and efficiency.

Ok, I said all of that to say this… Over the last 20 years tremendous strides have been made in implementing lean manufacturing concepts in a number of manufacturing settings. What have been lagging behind, dramatically, are similar concepts in “soft” or office processes. Office processes are notoriously wrought with all sorts of waste. When was the last time you had waited on a reply to an email on some issue that required an answer prior to completing some other task? I’m not being self-righteous, I engage in waste myself, and waste is unavoidable because we are human and flawed.

That said small incremental improvements (called kaizen in Japanese) is what is required to move forward. We’re talking evolutionary, not revolutionary. You can’t fix the world all at one time, so how do you, as the cliché goes, eat an elephant? The answer is one bite at a time. That’s what kaizen is all about making small incremental and measurable improvements in processes.

In the referenced article from the Havard Business School, the author Julia Hanna discusses the ideas of bringing lean principles to the office process and services industries. There are so many sectors that need this kind of help, the social services and non-profit sectors are prime candidates for this type of assistance. The non-profit sectors are often overworked, but have people with a passion for what they’re doing, and they’re often doing and re-doing tasks over and over again. I’m involved as a board member of two non-profits and see this as an ongoing problem, and for these organizations to succeed, simplifying processes to minimize labor, material, in short waste, is a key business concept.

Trying to make the connection for the office folks is another story though, it’s often the case that conveying the need for this type of improvement is difficult to effectively communicate if the individuals involved don’t really have a background for it. Also, not all lean principles translate into lean office concepts; some creativity in plying the lean concepts is in order.

This is an excellent article discussing some of the research in implementing lean in an office, and perhaps we’ll see more of it in the social and NPO sectors.

Here are some good references to read:

Wikipedia: Lean Production

SME: Lean Office

Now, I’m off to Poke Yoke a purchasing process.