Making A Start With Lean: How To Begin Improving Your Business Processes

There are many books on lean and some complicate their message with obscure Japanese terms and complex formulas. Very few books that I am aware of give a clear, simple “how to get started” guide, so here is my attempt at getting you started:

Understand your business processes

The key starting point to lean is to understand your business processes. What does your organization really do that adds value for the customer? Is it quality? Level of service? Speed of response? Unique technology? Once you have made a good list of what you do well for the customer, ask what your organization does that the customer does not value. What do you do wrong? Late deliveries? Quality problems? Poor information? It is worth starting to remove the simple mistakes that annoy customers.

Once you understand what you do to add customer value, start to map out the business processes that deliver the products and services that create that value. At this stage, just consider the high level processes – delivery, inspection and packaging, assembly/manufacturing,  production/project planning, process order etc. Identify six to eight top-level metrics that show how well you deliver the right thing at the right time. These measures include quality, delivery performance, speed of response, cash-flow and stock levels. Once you understand the process flow for each product or service family, and you have basic performance measures, you can start to group them together into Value Streams – those products and services, which go through similar process flows.

Map Each Value Stream

Operational Value Streams will usually have at least 25 people in them, but rarely more than 150; and they will usually account for at least 10% of revenue each. It doesn’t really matter how many Value Streams you define as long as they can be identified as having distinct business processes and activities with a group of people that can be formed into a cross functional team that can work together for improvement. Ten to fifteen people from that cross-functional team should be brought together to map their Value Stream in detail. The team should represent a true cross-section of the Value Stream and include the Value Stream manager, at least one supervisor, one person from marketing, supplier management, purchasing, finance, engineering and maintenance representatives, operators, a customer services representative and so on. The team’s task is to map the Value Stream in detail and assemble data on its performance. Each step, stage and activity in all the processes that form the Value Stream needs to be included in the map, in sequence. Key items of data to collect include:

  • Total time per work day
  • Regular planned downtime, meetings
  • Available time
  • Number of people in process
  • Number of items processed per day
  • Cycle time (average time to perform the activity)
  • Average time waiting in queue to be processed
  • Frequency at which work arrives (pattern of arrivals)
  • Delivery schedules
  • Inventory levels
  • Equipment used
  • Quality level (% right first time) and quality issues
  • Distance travelled for jobs
  • Information/paperwork required and completed

Putting this information together for every step in your business processes and Value Streams will take time, but it will provide a wonderful insight into how your business works, where the problems and constraints are, and how you might start improving the process.

To finish, the Value Stream mapping team should put together an improvement action plan, prioritizing the areas for improvement and the resources needed for this. Build on this momentum by quickly approving the improvement plans and setting up cross-functional teams to implement them. Set a fairly tight deadline for the improvements to be implemented and work with the teams to plan the next stage of improvements. Throughout this whole period, keep everyone in the organization informed with progress and post key performance indicators visually in every area of the business. There is nothing complicated about getting started with improvement, it simply requires a time commitment and some facilitation. This investment will more than repay itself in improved performance and much greater team-work.

Guest post by Zintro expert Ross Maynard

 

 

 

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