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LEAN Misconceptions – Only for ‘Big’ Organisations

LEAN Misconceptions – Part 5

The Lean Philosophy has been around for many years, but unfortunately it is not always understood, predominantly because Lean is thought to be:

  1. A cost reduction exercise
  2. A process to reduce the number of employees
  3. Only applicable to ‘manufacturing’ organisations
  4. An ‘operational’ issue that can be solved by the ‘operations people’
  5. Only for ‘big’ organisations.

Nothing could be further from the truth!

In this series of articles, I will discuss each of these misconceptions and demonstrate that Lean is about business; any and every business. A Lean business strives to understand what the customer really values, and then maximises customer value. Lean is not a short-term fad, but a long-term commitment towards continual improvement that involves every system, every process, every department and every employee within the organisation, irrespective of it’s size.

Misconception # 5: Lean is only for ‘big’ organisations

Lean is applicable in EVERY organisation as long as there is an understanding that every function or service provided by any person, department or organisation is a process that can be documented, standardised, and most importantly, improved. Improving any process necessitates the identification of waste within the process, where waste is defined as any activity that adds no value as seen from the customer’s perspective, i.e. the extra (wasted) time, labour and materials spent producing the product or service. Using the above premise and the fact that no business process is waste-free, Lean can be implemented in any environment, as every business process can be analysed and improved.

The original work of the Lean guru’s (see Misconception # 3), focused on large manufacturing organisations which created a perception among many business owners and managers that Lean is only applicable to big companies. The broad application of Lean across these large companies meant that they had to allocate significant resources to Lean, which typically included dedicated Lean personnel, a Lean office and in many instances a Lean leader or manager who reported to the CEO. Today, large companies that are serious about implementing Lean, create the infrastructure and allocate the resources to ensure that Lean receives the attention it deserves, for without this, the implementation would not be successful.

Small organisations, including the ‘one-man-band’, can still implement Lean as long as the owner or Managing Director supports and drives the program and is of the belief that no processes at the company is perfect, i.e. waste-free. A typical SME will often be unable to allocate the personnel resources to Lean that a larger company can, which means that staff may have to ‘wear a number of hats’….a common situation for most SME’s, i.e. the Lean leader will typically also be the business owner or MD. Under these circumstances, it is not uncommon for SME’s to achieve Lean success at a faster pace than a big company.

Lean uses a number of tools and techniques (see Lean Misconceptions #4), to identify waste and then make process improvements. Because some of these tools are easy to learn, they are not restricted to big companies and budgets, and any organisation can, with little investment, acquire and use these techniques. A good example being workplace layout design, e.g. a local SME manufacturer uses a spaghetti diagram to analyse and change the physical layout of their plant as products and processes change. In doing so, they ensure that the flow of goods and services is as efficient as possible which directly contributes to a reduction in lead time (less waste), and therefore greater customer satisfaction. Another SME ensures that improvement ideas generated by staff are discussed, with the MD in attendance, on the 1st Monday of every month, and he then ensures that the implementation of all improvements is carried out as quickly as possible. Another Lean tool, the housekeeping concept of 5S (sort, sweep, simplify, standardise, sustain), is applicable to any organisation….it can even be used at home!

 

Mike Karle