‘Lean” is a way of organizing work and production designed to remove any activity or process that does not produce value for the customer. Its premise is that when activities produce waste it is costly for any business.
Kepner-Tregoe has been using various tools and methodologies of lean since the company was founded 50 years ago and a couple years ago in Australia decided to create a course on the subject. Last year the company also made the course available in the North American and European markets. It is taught at various locations by many of the firm’s internal consultants, such as Ryan Thornton, who also teaches about lean manufacturing.
Originally developed for an industrial environment, lean can also be applied to many aspects of an office environment. The first step in implementing lean is to distinguish between valuable activities and the ones that create waste.
A “value-added activity,” which changes the form or function of a product, is something customers are willing to pay for — all the steps in automobile manufacturing, for example, from acquiring the raw materials through assembling the vehicle. By contrast, a “non-value-added” activity is anything that does not add value to a product. Thornton offers the 20 hours of testing after the car is manufacturing as an example.
“As a consumer, I don’t necessarily care that it took an automotive manufacturer 20 hours worth of testing,” he says. “All I care about is that I have a 100-percent quality product when purchasing.”
Gary Miller, a consultant in the firm’s industrial products practice, is teaching “Lean Office” on Tuesday, September 16, at 8:30 a.m. at Kepner-Tregoe’s offices on Research Road. Cost: $1,795. Call 609-921-2806 or visit www.kepner-tregoe.com.
Waste of overprocessing. This type of waste involves making more product than is required by the next step in a process or making something faster or earlier than is actually required. One example is making extra copies, like forms in duplicate or triplicate, when one is sufficient. This also creates a twin waste of extra inventory.
If Step A in a process is producing 30 items, but Step B can only use 2 a day, then the extra 28 copies constitute waste. “Step A should only produce what step B requires,” says Thornton. To those who may argue that it is cheaper to produce in larger volumes, Thornton responds with a central concept of lean manufacturing — that reducing the interval required to change from one process to another is more efficient.
Push and pull. What lean proposes for getting rid of the waste of overprocessing is to implement a pull system, one that produces to customer demand. Rather than having a contract specifying that the customer will submit a firm order for a month’s worth of inventory, the supplier should be producing only to the firm’s order, says Thornton.
In the contrasting push system, which is more typical, the six-month forecast defines the output of Step A, which pushes to Steps B and C. Any excess sits in a warehouse until it needs to be shipped.
Thornton adds that if the client suddenly needs an increase of 10 percent immediately, then a lean organization, with reduced change-over time, should be able to adapt and run the extra product without causing mass chaos in the production process.
In a pull system the order comes in to the tail end of the process. Suppose that a Latin American company orders two batches of a pill for tomorrow. Workers at Step C, where the pills are coated, informs workers at Step B that they will need two drums of uncoated pills. Step C “pulls” what it needs from Step B, which pulls from Step A. Although the best case is to have a one-piece flow through the entire system, realistically a manufacturer will set a ready-to-go quantity of inventory to be sitting at each step of the process.
There is a good reason why more people are not implementing true pull systems — they work best with relatively high volumes and in relatively stable environments. Although it is more difficult to implement a pull system when demand fluctuates and volume is not constant, Thornton maintains that there are steps within any type of process where it is possible to implement a pull system.
Much of what is needed to move to leaner processes is a paradigm shift away from the idea that it is more economical to produce in larger quantities at one time because the cost of changing over is high. The answer to this, says Thornton, is to reduce the change-interval from, say, four hours to 10 minutes. With an interval of four hours, it makes sense to run two days worth of volume. But if a manufacturer can get the time down to 10 minutes, then it is easy to change back and forth and produce only what the customer demands.
Reducing time. To reduce time a manufacturer must look first at activities that can only be done when the equipment has come to a stop or is idling. Thornton offers an example from a previous job where a huge coil needed to be changed while a machine idled. Instead of starting preparations for the coil change only when the need arises, as tends to happen, someone from shipping could go get the coil and get it prepped ahead of time. When it is time to change over, the required people and tools should be ready to go. Where it is possible, change processes can also be automated.
Another way to reduce change-over time is to carefully examine a process. A company might set up video cameras to see how different operators perform a particular process. Then if Joe completes the process in 5 minutes when the average for the other employees is 10 minutes, Joe’s process becomes the standard approach that everyone else is trained to do.
Wasting time. Waste happens any time that resources — either machines or people — are sitting idle. A truly lean organization, therefore, requires that employees are sufficiently cross trained to be able to do whatever work needs to be done at a particular time.
An example of waiting time in an office environment is when someone has to wait for a signature before proceeding with a project or activity because of staggered work times or summer hours.
Waste of transportation or movement. This involves unnecessary movement of a product or process through a system. One of Thornton’s clients, for example, had an employee who walked 14 kilometers a day chasing paper. Reducing this type of waste often requires taking a look at the layout of a manufacturing or office environment.
Waste of overservicing. This occurs when a process involves an activity that the customer does not perceive as valuable, for example, quality control at the end of a process. An alternative would be to put processes in place to prevent errors at every step.
Another type of overservicing happens when government bodies, like the Food and Drug Administration, require unnecessary documentation that does not add value in the eyes of the customer but is required as a cost of business. Thornton suggests that an organization may want to question why a particular regulation is necessary and whether it needs to be done for every single product.
Sometimes a business might even be doing more than is required by the regulatory body. Another example of the waste of overservicing is excessive meetings that discuss an issue already discussed and resolved.
Waste of motion. This differs from the waste of movement because it focuses on how people move around their actual workspaces. In an office where the occupant’s need to file is fairly constant, placing the filing cabinet two cubicles away results in much wasted motion.
Thornton graduated from Marian University in Fond du Lac, Wisconsin, with a bachelor’s degree in organizational communication in 1996. He joined Material Sciences Corporation, an automotive supplier, where he stayed five years as manager of the inside sales group responsible for account management on a day-to-day basis. He learned about Kepner-Tregoe’s problem-solving methodology through one of his clients, and in 2004, having finished an MBA in international business and marketing at Loyola University, he joined Kepner-Tregoe to work in its industrial products practice.
Always interested in the travels of his father, who worked primarily as a plant manager at different manufacturing sites, Thornton was looking for a job with some travel that would also expose him to different industries and processes. At Kepner-Tregoe he splits his time between running workshops, which are either for the general public or for internal employees at a client site, and consulting.
Thornton is eager to expose the office sector to the lean concepts that have been used in manufacturing for a long time. “The same concepts utilized within manufacturing can be used in an office environment,” he says, “and that’s where we are seeing the biggest opportunity and need.”