What is Lean? How does a business become Lean? How can it help your business?

The government is looking to provide crucial support to High Growth, Small and Medium sized Enterprises (SMEs).

As part of this support they have teamed up with training providers such as Pathway Group to provide training in Lean

processes and management.

• Its core principle is to maximise customer value, while minimising waste

• It creates more value for customers with fewer resources

• It focuses on the key processes in the business in order to continuously increase that customer value. This kind of activity is often thought to be the preserve of manufacturing organisations, however Lean applies to every business and in every process. In fact, many of the best examples of lean implementation in business come in service organisations

What is Lean?

Simple: If your business spends more time on creating value for its customers and uses less resource in doing so, the

benefits to the organisation are significant.

Why Lean?

• Specify value from the viewpoint of the end customer, by product family – The first step is to realise that only a small amount of the time and effort in any business, actually adds value to the end customer. We need to clearly define what it is a customer values and how we deliver that, and then look to remove the waste (activities which don’t add value to the customer) from the system

The Core Principles of Lean:

• Identify all the steps in the value stream for each product family – The value stream is the entire process that contributes towards delivering a product or service to a customer. Once we have identified what your customer wants, we can then identify how we are delivering that to them, identifying and removing waste along the way

The Core Principles of Lean:

The Core Principles of Lean:

• Create flow by eliminating waste – Typically when you first map the Value Stream you will find that only 5% of activities actually add value to your customer. Flow can be created in your business by eliminating the waste

• Respond to customer pull – Understanding customer demand so that you produce only what the customer wants when the customer wants it

• Pursue Perfection – The initial steps will be radical changes to individual process in a business, however as these link together the gains become even more significant. The leaner we become the more waste becomes visible. With lean, we are constantly striving towards a state where every action adds value for the end customer

The Core Principles of Lean:

There are three key conditions when defining what customers will value:

• It must transform the product or service• The customer must be willing to pay for it• It must be done correctly the first time

Apply these checks to any process, and only if all three are confirmed does that process add value.

How do I know what customers value?

Waste in business comes in three main forms; waste due to variation, waste due to overburdening people, equipment or

systems and the seven common forms of waste.

The seven forms of waste as defined by lean are:

• Transportation – Is there unnecessary movement of parts, materials or information between processes?

• Waiting – Are people, parts, systems or facilities idle – waiting for something else to be complete?

What is waste?

• Overproduction – Are you producing sooner, faster or in greater quantities than the customer is demanding?

• Defects – Does the system result in anything the customer would reject?

• Inventory – Do you have raw materials, work in progress or finished goods that are not having value added to them?

• Movement – How much do you move materials, people, equipment and goods within a processing step?

• Extra Processing – How much extra work is performed beyond the standard required by the customer?

What is waste?

So I understand what lean is – where do I start?:

• Find a Lean Champion – A leader within the business needs to take responsibility for the move to lean in your business

• Get the knowledge – Get training and get a consultant to teach lean techniques and how to implement them as part of the overall system

• Find a Lever – Use a crisis or a competitor which make it imperative to improve performance

• Map the value streams in your business – Create a plan for how you can improve these value streams, removing waste

Getting started with Lean

• Don’t view Lean as a way of reducing headcount or cost cutting - The purpose of Lean is to create value for customers by eliminating waste. Use your people to create more value

• Always implement lean as part of the overall system - Trying to implement lean to individual elements will not add value to the customer particularly

Avoid the common pitfalls with Lean:

• Limit the scope - Create a project which is small enough to manage and succeed at and big enough to make a difference

• Be prepared for greater challenges and problem - Starting out with Lean may well uncover more issues than you expected, be ready for that, and aware that it will be a challenging process

Avoid the common pitfalls with Lean:

To find out more about how you can get your business started with lean, contact Pathway Group for an initial consultation on:

Call: 0121 707 0550E-mail: info@pathwaygroup.co.uk

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