Transforming operations – the lean way

Effective lean transformations yield major improvements not only in productivity, but also in speed, quality, customer loyalty, employee engagement and, most importantly, growth.

Attaining these results, and ensuring that the underlying changes endure, is possible only through lean management’s comprehensive approach. Rather than focusing only on “how the work gets done,” lean management addresses all dimensions of a transformation at once, recognizing that each provides crucial support to the others.

• Put the voice of the customer at the heart of the business.

Everything a lean organization does is geared to helping people work together more effectively to deliver exactly what customers value. Customer is the reason why business exists therefore each and every employee must treat customer as the king. ?

• Strengthen performance systems. ?

Lean involves reshaping management roles, behaviours and supporting infrastructure to make performance and targets communicated properly, more transparent, to ensure effective deployment of resources, and to encourage root-cause problem solving.

• Enhance organization and skills.

Lean shifts responsibility towards the front line and demands new styles of leadership. These new roles and responsibilities must be clear and require stronger mechanisms to develop skills, capacities and capabilities at all levels of the organization.

• Influence mindsets and behaviours.

While the company’s leaders understand that organizations cannot change unless their people do, lean management further recognizes the need to magnify the commitment of all employees to improve continuously.

• Make processes more efficient.

To fulfil a customer need from initial request through to completion, an organization will mobilize a whole series of processes and resources that cut across internal boundaries. Focusing on how value flows to the customer allows the organization not only to identify and eliminate waste in time, resources, and energy, but also to make a dramatic difference in customer experience.

These five dimensions come together in a re-examination of everything a company does, beginning with very basic questions, such as: how easily can our customers access our services and/or products that have the features and functionality they need?

The questions quickly become more focused, asking whether, for example, employees have the skills and perspective necessary to probe for unstated needs, process an application efficiently and make the right risk decisions.

Empowering the work force

Lean environments are characterized by the application of a few overarching principles, such as “eliminate waste.” These principles are enabled through systems that bring lean management into each person’s working life in a tangible way. The three systems that I believe are most critical to a successful transformation are:

• Performance management, so that everyone knows what they are supposed to do, which practices they should follow, whether they are meeting targets, and how they can improve.
• Capacity management, so that staff can systematically set priorities and exercise control over normal seasonal demand variability.
• Root-cause problem-solving, so that everyone learns how to identify, raise, and resolve issues more proactively.

Each of these systems in turn comprises a set of practical tools. Performance management is commonly delivered through the use of key performance indicators and goals aligned, visual performance boards and daily follow-up meetings. Taking an integrated view of principles, systems and tools is essential: without practical tools, lean principles remain abstractions that people quickly forget, while focusing on tools alone leads individuals to see them as nothing more than exercises in box-ticking.

Each tool in each system builds on the others; only through the resulting virtuous cycle will companies achieve the continuous improvement that lean management enables.?