By improving an “operating system”—the configuration of assets, material resources, and staff—a lean approach can cut costs dramatically, typically by 15 to 30 percent. But cost savings are only part of lean’s appeal, as demonstrated by the experience of Toyota Motor, the pioneer of these techniques in the 1950s and the only consistently profitable volume car manufacturer. Lean aims to optimize costs, quality, and customer service constantly. It does so by engaging and equipping employees to focus on creating and delivering value in the eyes of the customer and eliminating whatever doesn’t contribute to this goal. Contrary to popular belief, lean is about making a process or operation “fighting fit,” not about cutting it to the bone.
Many businesses have followed Toyota’s lead and undergone a lean transformation. A major European telecommunications company, for example, successfully applied lean techniques to a problem that was leading many of its customers to switch to competitors: the repair of faulty telephone lines. The company found that its call center operators, diagnostics experts, and repair technicians operated as though they actually worked for rival employers. As a result, it took an average of 19 hours to repair a line. Using lean principles, the company realigned its organization and invested in the development of team leaders. In the first few months of its pilot project, productivity increased by 40 percent and recurring failures fell by 50 percent. The program was then rolled out across the company’s national network, where it achieved similar success.1 Likewise, a major European bank used lean techniques to reduce the processing time for mortgage applications to 5 days, from 35. Because fewer applicants dropped out of the process, the bank’s revenues grew by 5 percent even as processing costs fell by 35 percent.
Is any of this relevant to the “lala” enterprise?
Not surprisingly, the concept and language of lean, rooted as they are in manufacturing, spark cynicism among many exporters. Some feel that their priority should be matters of policy, not operations; others resent the notion that they are somehow part of a production line. Moreover, without the incentive of the profit motive, these “old guard’ managers believe they have neither a reason nor the levers to pursue a lean approach.
Yet practical experience suggests that they can. If we look at how Lean has been successfully implemented in Government organizations we shall be pleasantly surprised. In a government office processing large volumes of standard documents, lean techniques achieved double-digit productivity gains in the number of documents processed per hour and improved customer service by slashing lead times to fewer than 12 days, from about 40, thus eliminating backlogs. The proportion of documents processed correctly the first time increased by roughly 30 percent; lead times to process incoming mail decreased to 2 days, from 15; and the staff occasionally attains the nirvana of an unprecedented zero backlog.
In a military armored-vehicle repair shop, a lean transformation generated a 44 percent increase in the availability of equipment, a 16 percent reduction in turnaround times, and a more than 40 percent increase in “right the first time” production. This achievement put about 40 more vehicles into operation at any one time. Moreover, the repair shop progressed from constantly missing its vehicle delivery deadlines to never missing them.
Persuading people to embark on the lean journey, where the last stop may be their own removal or reassignment isn’t easy. To succeed, old guard organizations must find a way to align their growth strategy—providing new and better services at limited cost—with a regard for the interests of their workers. Incentives come from the prospect of more meaningful work, potentially with room for greater autonomy or a chance to develop new skills.
Value is always defined by the customer. Not by the factory’s shareholders, nor by the research and development division, but by the guy who ultimately writes the check to purchase it.
An engineer might think that Beethoven’s Ode to Joy sounding each time the car’s doors are unlocked is a must, but if most drivers are fine with the good old chirp or find the feature annoying, none of the engineering, material or labor that went into the project added any value to the car and they were therefore nothing more than waste.
Value is anything that a customer is willing to pay for.
Looking at activities through a lean lens makes you add to this value & reduce everything else which is a waste. Lean thus , makes you “do more & more with less & less”
So what ever be the nature of your business, in order to remain meaningful you need to be Lean, and you need to start right away!
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