“Great things are done by a series of small things brought together.”
– Vincent Van Gough
In today’s world, consumer choices are becoming increasingly complex. With numerous online and offline purchase options, consumers are expecting more personalized products and services. The impact of digital media and constant developments in the markets are affecting the preferences, needs, and desires of consumers. Thus, the focus of businesses is also shifting from a volume-driven model to a variety-driven model to cater to these changing tastes and preferences. By following this model if businesses intend to maintain a sustained level of consumer satisfaction while being profitable, they need to trim the flab in their value chains by implementing Lean.
Over the past half-century, Lean has progressed from being used only in manufacturing to other business areas such as software development, services, and business strategy. Irrespective of the nature of the business, Lean is being used to make the processes more streamlined, cost-efficient, innovative, and waste-free.
Role of Technology in Lean
With changing face of technology, how lean is being approached is also rapidly changing. The merger of physical and digital systems has resulted in the transition to Industry 4.0. We now talk about technologies like the Internet of Things (IoT), Big Data Analytics, Cloud Computing, Augmented and Virtual Reality, advanced Machine Learning, and Artificial Intelligence which are aiding businesses in improving their performance. Businesses are now focussing on achieving operational excellence by taking advantage of these new technological developments. The lean principles are being applied in combination with these technologies to yield better results. Some are calling it ‘Lean Industry 4.0’!
Lean Implementation Methodology
Irrespective of the technological advancements, the underlying principles and implementation methodologies of Lean remain the same. The below infographic details the Lean Implementation Methodology.
- Set Clear Goals – In this step, businesses need to understand what their end goal is and communicate that with everybody involved in the process. Businesses should identify the areas in the business process where there is a scope for improvement. Bottlenecks or the processes which are hurting the business performance need to be addressed first. Expected results, timeframes, and budget needs to be fixed as a part of this step.
- Create awareness and a Lean Mindset – In any organization, people are the drivers of change. For any Lean project to be successful, a constant effort is required from the management and employees alike. Lean is not a technology; it is a philosophy. For this philosophy to percolate through all the levels of an organization, it is important to cultivate an environment of learning and shared leadership where continuous improvement is everyone’s responsibility. Once employees understand that, they will be more likely to embrace the change and new ideas which have merit are quickly adopted.
- Identify the change agents – Start Small – In this step, for a first-time Lean implementation, businesses need to identify the departments or processes where the employees are familiar with and welcome change. The change agents can be identified within an organization or experienced consultants can be hired from an outside organization to save time and effort. Once the key people are identified it is advisable to work on a small pilot Lean implementation where the outcomes can be easily measured. This prepares the teams involved for a full-scale Lean implementation. Also, the success of a pilot boosts the morale and confidence of the employees.
- Introduce Lean Principles and Tools – The core principles of lean will help businesses to identify and eliminate wastes. This step is the ideal time for businesses to introduce the team to these principles and get them acquainted with a variety of Lean Tools. After this step, the team members should be able to formulate a solution to identify and eliminate or change any part of a process that does not add value.
- Monitor the progress – In this step, the results of the implementation should be measured constantly and any scope for further improvement or adjustment should be captured and communicated. To sustain the changes made it is advisable to have Key Performance Indicators (KPI) and have a quarterly performance review against them.
5 Core Lean Principles
- Identify value – The main goal of any business is to provide a product or service for which a customer is ready to pay. Hence, the value should be reviewed from the customer’s point of view. The processes that do not add to the value of the product or service are redundant and thus should be considered as waste.
- Map the value stream – The next core principle is to create a value stream map of all the value-added and non-value-added activities which are involved in the process of delivering a product or providing a service to the customer. This enables businesses to analyze each step in detail concerning the time, cost, and contribution to the value. All the non-value-added activities can either be modified or eliminated to enhance the performance of the process.
- Create continuous workflow – This principle focuses on smoothening the flow of the process without interruptions or delays. Breaking the process into manageable steps, combining two or more activities, leveling the load across the process, training, and multi-skilling are some methods that can be employed to create a continuous flow.
- Develop a pull system – One of the biggest wastes in any process is Inventory. To solve this issue, Lean focuses on Pull instead of Push. Unlike the traditional push system, a pull system works backward from customer to production. All the processes work based on the demand for the next process as their input. A Pull based system allows businesses for Just-in-time production and deliveries. This ensures that there is no excessive raw material and work-in-process inventory in the whole process while having enough inventory to continue the processes smoothly and deliver the right product/service at the right time to the customer.
- Seek continuous improvement – As mentioned earlier, Lean is a philosophy, it is not perfection but the pursuit of perfection. This makes it a continuous process. Organizations should continuously seek opportunities to develop performance and create an environment and culture where new ideas can thrive.
Challenges in Lean Implementation:
- Resistance to Change – Convincing people to adopt a change is the most challenging aspect of Lean implementation in any organization. Though the new methods promise better performance, users often move back to the older methods.
- Lack of understanding of basic Lean principles – Practicing Lean needs patience. It takes a tremendous amount of time and effort to gain a deeper understanding of the Lean principles. Applying tools to the problem at hand without even understanding the need, application, and fit do not yield the desired results.
- Going for Quick Fixes – Traditional processes do not allow the problems to be surfaced immediately. Businesses often go for quick fixes which provide a temporary solution to the problem instead of identifying the root cause and eliminating it.
- Broken Communication Channels – One of the key principles of Lean is that whenever an issue is identified in a process, the whole process needs to be halted until the issue is resolved. This is done to avoid further damage to the whole process resulting from the issue. For this to happen, a seamless communication channel should exist across the organization where the required information can be accessed and shared quickly. However, many organizations have complex or broken communication systems and unwanted hierarchical approvals which delay decision-making.
- Management philosophy and culture – Culture is not developed in a day or two. Developing a Lean culture needs constant efforts, training, and monitoring from the management’s side. Discontinuity in business strategy, changes in management, and weak decision making at the top level impact the Lean implementation in the entire organization.
Creating a Sustainable Lean Culture
For any organization to survive for the long-term amidst growing competition and changing macro-economic landscapes they must stay Lean. If done right Lean makes an organization adaptable to these changes thus providing organizations to serve their customers longer.
To reap the benefits of Lean and prosper for the long-term, organizations have to believe and imbibe the attitude of continuous improvement – all processes and people can be improved. Their goal should be to set standards for themselves and compare their journey towards achieving those standards consistently over a long period. An organization where everyone improves their work processes, top to bottom progresses and will survive and prosper for the long-term.
Read our insight on Supply Chain 4.0:
Supply Chain 4.0 and the key technology drivers
How to start and not stop at the end of this article piece?
I would recommend starting simply by just taking this approach, which has negligible risk, simple and yet an amazingly effective positive step towards our goal of a proactive strategy
A) Take pen -paper or manual method (start now)
Start implementing the recommended strategy using your existing technology resources for a known and low-risk segment of customers within your business to find out what works and what doesn’t. Indeed, this causes efforts, but this will pave the way for better clarity around unknown risks.
B) Take help from technology
Work towards making it unattended, assisted by using Super-fast digital solution such that it works autonomously without losing its efficacy by engaging a solid, affordable Business and Technology solution partner.
If you are a CEO/COO/CIO/Managing Director/General Manager who is spending more time in reactive/preventive mode than future-facing, please reach out for an exploratory conversation.
Our Contact details
Balasubramanian(Mentor and Director Teams Group)
Pradeep Mishra (Director and Co-founder)
pradeep.mishra@aurionsystems.com.au
Ashok Mulchandani (Partner – Business Success and Strategic Transformation)
ashok.mulchandani@aurionsystems.com.au
Amit Bhagat (Director – Business Strategy)
amit.bhagat@aurionsystems.com.au
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