The term “Lean Thinking” first came into use in 1996 when James Womack and Daniel Jones published their book of the same name. The book distilled their thoughts after studying the Toyota manufacturing business. A lean, waste free organisation.
Since then, those first lean ideas have come on a long way. They are no longer confined to factories, you will find them in hospitals, call centres, hotels and public services around the world, systematically driving out waste.
So what is lean?
At its core, lean has one deceptively simple idea:
Businesses create things wanted by customers. Things that customers will pay for. This point acts as a standard to put activities into one of two categories:
- Value, actions that contribute to a customer’s needs, things that a customer is happy to pay for: adding chocolate to a choc-ice, putting a pot over a broken leg or making a decision on a mortgage application.
- Waste, actions that don’t contribute and that a customer would rather not pay for: storing the choc-ice for 6 months in a cold store, queuing to have your broken leg plastered or offering up the same information multiple times before anybody will decide on your mortgage.
Lean isn’t about cost cutting, sacking staff or berating suppliers. Lean is simply the removal of all those wasteful activities. If you remove waste your operation gets faster, slicker and less expensive to run and your customers get happier.
Philosophically, once you have removed all the waste, then you have the perfect process. But I have never seen perfect, and that is half the beauty of lean, there is always something that could be done better.
You can apply the principle to everything you do, not just your core operation but your business processes as well, finance, marketing, research and development, even your staff canteen.
The difficult bit is spotting the waste
You can’t read the label of the jar you’re in ~ Anon
How do you spot the waste?
You will never be lean unless you can find the waste. It comes in all shapes and sizes and is deceptive, but it is endemic. Once you “get your eye in” you will see it everywhere. It comes in many forms, the mnemonic TIM WOODS will help you find it:
Transport
Moving goods or services further than needed, this might be sending information packs physically instead of using e-mail, or shipping goods to a central warehouse to have them sent all the way back again.
Intellect
Not using the skills and capabilities of your workforce, are you struggling with a spread sheet when you have a Maths graduate working the tills taking payments? Are all your staff empowered to do the right thing?
Motion
The unnecessary movement of employees to do a job, (transport relates to goods). If you have offices in 15 locations how much are you spending on travel and expenses? At the other end of the spectrum do your staff have to repeatedly copy and paste the same information?
Waiting
Delays between one stage and another. How much time do you waste waiting for approvals and clarification or data processing which could be done for customers instantaneously? (Google wouldn’t be so successful if customers had to wait overnight for their search query to be batched up and processed).
Over-production
Making more of something than needed. Have you ever seen somebody hired for a role that didn’t exist? Or have you ever written off stock because you made too much and you can’t use it?
Over-processing
Adding more to a service than a customer is willing to pay for. My personal pet hates are quality checking the quality checkers, or having to get approval in triplicate.
Defects
Errors that cause rework. Things that don’t work quite as they should. (We don’t have any of this where I work, honest)
Stock
A backlog of things waiting to be used or dealt with. Spare parts sitting in the back of a van, over capacity servers in your IT network (capacity that is never in the right place) or e-mails sitting on your PC.
The funny thing about waste
More often than not we create waste in the name of efficiency, tasks are batched up because it is more cost effective and work arounds are developed to keep things moving.
Worse still, once you have waste it breeds. One type of waste quickly causes another. A backlog of e-mails causes a defect because a decision wasn’t made, causes waiting for a customer, causes transport of a product from one part of the country to another…
You won’t be lean if you get hung up about which kind of waste you are looking for. You have to act on it instead.
Can you find TIM WOODS working with you? Download this pdf to help you look.
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Hi James,
I like the mnemonic. Very useful. Lean always seemed to me to be a bit liking systemically stating the obvious ie. what is the best way of doing this.
Vigilance is obviously hard to keep up 100% of the time.
Adrian
Oops. Forgot to day that I don’t think your TIM WOODS link is working
Adrian
Thanks for pointing that out, fixed it now I think
Hello James
The issue with waste is, as you point out, seeing the waste. As Heidegger pointed out we can only make sense of what shows up because we bring an already existing way of understanding the phenomon that shows up in our lives. Put differently, what show up as waste depends on your view of understanding the world. Lets make this clear through an example.
Here is what John Timpson writes “In Max Spielmann, a chain of shops we bought in December 2008, every complaint was referred to an area manager, who in turn had to get authority from a complaints department …….before giving the customer any compensation. This took time. Few complaints were settled in less than a fortnight and many take longer than a month. The Complaints department was constantly being pestered for decisions keeping their team of 15 people busy…”
Clearly the management of Max Spielmann saw the Complaints department of 15 people as creating value for the company. Yet, John Timpson did not. He placed the responsibility and authority for dealing with complaint effectively with the store staff who actually dealt/served/knew their customers. And in so doing he did away with the Complaints department and the fifteen roles in it.
John Seddon would argue that anything that gets in the way of flow constitutes waste. Which is what you refer to when you talk about batching. Years ago I used the philosophy of flow and cylce time to identify ‘waste’ in a drinks company and act on the key bottlenecks causing waste. Then again, I was not part of the operation and thus ignorant/stupid/bold enough to question the status quo.
Finally, tolerance for ‘waste’ is a cultural issue. I say that the culture you and I swim in not only tolerates waste, it positively encourages it. The search for ‘waste’ is only undertaken with commitment when resources are scarce and their is willingness to act and deal with the politics. I find these to be scarce.
Maz
Maz, I think your point about culture is the really important one. Not only does a “controlling top down” culture stop people form seeing the waste (your complaints department being a case in point) it also stifles the views of those who can see it for what it really is.
Thanks for the comment
James