Lean: 2 Foundational Concepts That You’re Probably Missing.
Despite humble beginnings, Lean process methodology has expanded well beyond manufacturing into a vast number of industries, from healthcare to entrepreneurship. Organizations of all types are evaluating the age old equation, Profit = Revenue - Costs, and are targeting Lean strategies to reduce Cost. There are countless resources blueprinting the pathway to a Lean future, describing in excruciating detail how to measure and Six Sigma your way into the black. Lean has gotten so big, in fact, that “Lean” is becoming a buzzword, losing its very essence each time the term is uttered among managers.
The term “Lean” lends itself to be misinterpreted. I have worked with large, well respected organizations that have decided to adopt Lean processes and completely missed the mark. Upper management in many organizations decree down to their masses that the new “Lean process” is to do the exact same things they did before, only in half the time with half as many people. These companies then dust off their hands and say “We’re now a Lean company.” This isn’t Lean, this is just a company telling their employees to simply “Work harder.”
I spoke with one manager at an organization who told me “We’re pretty Lean. Sometimes, I think we are too Lean.” Curious, I asked “How can you be too Lean?” She then proceeded to tell me, “We don’t have enough people.”
It should be needless to say, this isn’t what Lean means. Here are two foundational Lean ideas that need to drive any application of the Lean process:
1. Does this add value?
Renowned management author Peter Drucker once said, “There is surely nothing quite so useless as doing with great efficiency what should not be done at all.” This is the backbone of the Lean movement. When starting the journey down making the company Lean, managers need to evaluate their current processes. Most managers make it this far, but focus instead on “how can we make this process faster/more efficient,” rather than “why are we doing this process?” It is important to keep the “why” at the forefront when evaluating processes. What is the goal you are trying to achieve? What job are you trying to get done? If the answer is the dreaded “This is just the way we’ve always done it,” then you may have identified a substantial opportunity for optimization. Remember, the primary goal of Lean is to eliminate all activities that do not add value. The byproduct of this is reduced labor and increased output. Too many organizations think that by simply reducing labor that non-value added processes will fall by the wayside organically. It takes a substantial effort to evaluate the “why”, but in the end those efforts will be rewarded with higher returns.
2. Small batch sizes
Another pillar of the Lean methodology is small batch sizes. While this originated in manufacturing, the concept translates to any process based workflow. Whether developing software, designing a new product, or preparing medications in a hospital pharmacy, small batch sizes increase efficiency, reduce waste, and provide valuable feedback. For a simple example, check out this video comparing small batch versus large batch processes for folding and stuffing envelopes. As the video demonstrates, one-piece flow is more efficient than large batch flow even when everything goes according to plan. However, the real value of one-piece flow is the ability to “stop the line.” As noted in the video, what if the folded paper didn’t fit into the envelope? In one piece flow, this mistake can be corrected immediately and the proper adjustments can be made for subsequent envelopes. Had this happened in a large batch, the mistake would not be discovered until all of the paper had been folded. This would require either all of the paper to be refolded, or in some instances all of the paper to be wasted. Not only does this waste physical resources, but more importantly wastes time, effort and labor.
The “stop the line” concept transcends production and can even drive your improvement project. For example, I have been involved in a number of development meetings that could have benefited from a more Lean approach. In this particular case, the process involved developers receiving a development request, designing the development, coding the development, and then presenting their new development to clinical stakeholders for approval. Once clinicians saw the development, we questioned why we needed it in the first place. After that meeting, all of the time spent coding was wasted. Had the process been more in line with small batching, clinicians would have seen the request before any coding or planning had begun and avoided all that wasted time.
So, when embarking on your lean journey, start with eliminating non-value additive processes and converting your workflow to small batch sizes. Even if that is as far as you ever get, you will gain some efficiency without dumping too much time or resources into a Lean project that never bears any fruit.