Many companies have encountered or are still encountering a lot of difficulties in implementing Lean Management. One of the success factors is certainly to consider Lean Management as a process approach.
What Lean Management is about?
Most experts or consultants in Lean management are unanimous on the subject: Lean is not a simple deployment of tools. It is also not a toolbox; the choice and use of a tool of a «magic» toolbox that allows to solve the current problem of the company by using the appropriate tool.
Improving the company’s performance is a much more complicated subject than using a tool. Rather, it is a matter of putting in place fundamental, technical and managerial principles that have the consequences of effecting a profound change in the way the company operates and in its culture.
Lean Management is above all a managerial approach and an industrial organization system that aims to generate Customer Value. The increase of this Value through the continuous improvement of the satisfaction of the requirements and the needs of the customers towards the products or the services, in quality, costs and delays, is the key that allows to obtain new contracts and new customers, and thus enables the company to grow and prosper.
Some companies even consider Lean Management as a market domination strategy or a catalyst to gain new market shares.
Basic Business improvement principles:
These principles are not unique to Lean management; the vast majority of international standards, management, improvement and industrial excellence models are based on the implementation of these principles, for example the EFQM (European Foundation for Quality Management), ISO 9001, 6 Sigma, Baldrige, etc... These principles, although different from one model to another in their entirety, contain common fundamental elements which can thus be summarized, according to their lowest common denominator, to:
- The goal of any business is to create value for customers
- Understand how this value is created through processes
- Address quality, cost and time to improve value
- Eliminate waste and variation (no added value and malfunctions)
- Seek information and facts for a solid foundation of analysis
- Experiment and learn
- Continuous improvement and breakthrough improvement
If the goal of any business is to create customer value, the question of how to get there lays the foundation for improvement. Any business activity of the company is (or should be) linked to this value creation, which consists in delivering products or services to customers in quality, cost and time. Any activity that is not related to this value creation or to the achievement of these performances can be considered non-value added. It is common to note that the ratio between value added and non-values added on most of the company’s processes does not exceed 10 or 15%.
The company processes characterize this value creation. They represent the different activities of transformation of the latter within the company starting from the raw material, parts, sub-assemblies, data entering in the enterprise to be transformed throughout the various activities or operations into products or services.
It is interesting and fundamental to note that this transformation of value through the company’s processes is transversal to organizations. For example, information or analysis from suppliers is transformed into drawings by the design office, then into assembly procedures by manufacturing engineering, then into products by manufacturing… and so on until the products or services are delivered to customers.
Process approach at the heart of Lean management:
The effective improvement of the company’s performance is therefore based almost entirely on the improvement of the company’s processes. This is the heart of Lean Management.
By identifying and eliminating non-values added (waste) into processes, Lean can improve the performance relative to delays, and therefore allows to produce faster, to reduce inventories, to accelerate the development times and the time-to-market of new products, to improve the productivity, to obtain more flexibility in relation to the customer demand and the variations of this demand, etc...
By identifying and reducing process variations, which generate defects, Lean can improve quality performance and thus reduce cycle times, improve production capacities, reduce inventories and reduce non-quality costs.
Implementing Lean Management in a company does not have any impact on the "business" part of the company, that is to say the know-how of the company. Waste or non-value added is transparent to the customer by definition: they are tasks, operations, information that have no impact on customer expectations once removed or eliminated. On the other hand, the customer does not want or would not want to pay for tasks or operations that bring no added value to the product or service.
Thus, it is by eliminating the non-added value present on all of the company's processes that this one will be able to improve its customer value, becoming more profitable and competitive. In an environment where the market and the competition are today on a global scale, companies and many have understood this, have only one alternative: to improve themselves. This is no longer an option; it has become a matter of survival. If the company doesn’t, competitors will do it.