Lean is a strategy to enable a business to achieve its goals as efficiently and as effectively as possible. Here, lean expert Dirk van Goubergen takes us through his thoughts on the key questions: ‘What can lean mean for my business, and how do I go about getting started?’
Lean literally means slim – being free of extra weight. In a business sense, it’s a bit different – a philosophy where companies get more out of the activities they perform. Less waste, more result. Lean is about techniques, processes, culture and focus on the longer term. As a business improvement approach, it is a proven collection of principles and instruments.
At the start of the 90’s, James Womack and Daniel Jones introduced the term into management literature. They researched the differences in performance between major car manufacturers; Toyota were way ahead of the curve. They revealed that the extraordinary success of Toyota’s production system lay in a total commitment to what we now call the lean philosophy.
The crux is that processes are set up to enable minimal disruption, minimal waste and the first-time production of items that can be efficiently delivered to the customer. And waste then? Well, it’s everything that doesn’t add value to the end customer. Since this approach became common knowledge, other companies have taken on the philosophy and added their own adjustments and improvements.
A step backwards
‘The main objective of lean is the smarter organization of all business activities’, says Dirk van Goubergen, former part-time professor at the University of Gent and director of Van Goubergen P&M. ‘Lean is a business strategy, one involving a continuing quest for perfection: you need to be prepared to continually seek out and implement improvement. Toyota have been busy with lean for more than 60 years and are still not satisfied. Lean is much more than a handy toolbox that you throw out to the business. You first need to take a step backwards, taking a look at the whole picture from a distance. Then you can look at how the operational activities (everything you do) can be organized so that everything is aligned in a logical order (flow) without delays or unnecessary waiting times (flowstoppers). All activities need to add value in the journey to achieving the goal. If they don’t, you waste time, energy and money. In other words: as an organization, you get further by working smarter than working harder.’
Initially, lean was primarily used by manufacturing businesses where concrete end products (cars, toys, televisions) were made and production processes were easy to follow from start to finish. That’s no longer the case. Van Goubergen: ‘I’ve seen here and abroad how lean has been adopted in construction, healthcare, energy companies, banks, insurers, government departments, local councils and all kinds of service provision businesses – big and small. Processes there tend to be less visible, often embedded in IT. However, you can still create visible flow, using magnets or post-it’s on the wall, or trays for specific time intervals. By making the process visible, you can follow the flow and understand whether you’re ahead or behind schedule. By thinking carefully about the right steps in the right order, and making progress visible (and measurable), you’re in position to understand and deal with problems effectively.’
Stop and think
The lean principles are universal and certainly apply to the SMB market as well. The problem there is that the time needed to take that backward step and think things through properly is often unavailable. Van Goubergen: ‘SMB entrepreneurs are often busy with the wrong things. I put it like this: you can keep running next to your punctured bicycle, but you’ll get where you’re going quicker if you stop, fix the wheel properly, jump back on and ride to the finish. There are wins to be found in all processes, and that certainly applies to the SMB. Look first at your core processes. Where’s the pain? The challenge is to invest time in business culture, training and the streamlining of activities. And the SMB certainly has advantages when it comes to re-organizing processes – there is usually much less hierarchy than in a large company with all its management layers. A change in culture is a more realistic and easier to implement ambition.’
Dirk’s top lean tips
• 200% commitment from management
• Think carefully beforehand about the longer term objectives
• Training and coaching for all employees
• Understand what has value for the customer; fail to deliver value, and you fail as a business
• Work smarter, not harder: focus on (sometimes difficult to see) waste
• Lean is never finished – continually strive for perfection
• Lean tools are there to help, not an end in themselves
• The whole value chain needs to be improved, not one component or department: that’s where the creativity of the employees needs to be focused.