Lean Allies in the Office
posted on February 01, 2004
Everywhere I go it is increasingly obvious that Lean principles cannot progress in operations alone. Once you begin to straighten out your physical flows you have to involve all the supporting processes in the offices. You need a production control system that can pass levelled orders quickly to your pacemaker process and on to your suppliers, a process that can collect and pay bills on time and a recruitment process that can get the right people in time, etc. etc.
The good news is that these processes are often more broken than operations and the gains from straightening them using Lean principles are even greater. This is not surprising because they have subject to less detailed analysis than operations, they typically operate in batch and queue mode and the process is not very visible. It is easy to hide waste and to resist standard work.
However getting the offices involved can also be a very powerful way of capturing the attention of top management. Everywhere operations complain that top management pays too little attention to their Lean improvement activities. They are always fighting for attention and support.
This route to attracting top management support was brought home to me during a visit to review a Lean manufacturing programme in a large multi- national firm. After a day listening to very good, but frankly rather tedious reports about progress being made in plants across the world, the meeting finally came to life when someone from corporate office described some pilot Lean projects they were doing in their centralised office support functions.
He told a stunning story about how an office team, with some expert help, had transformed the process for paying suppliers. Now incoming invoices were more accurate, payment approval was quicker and on time and they were no longer getting any calls from irate managers whose plant was about to be shut down because a supplier had not been paid. This touched everyone in the room. It was a breath of fresh air!
However the real significance was that these Lean office, pilot projects were being led by someone with a finance and strategy background. A background shared by most of their senior managers. By quantifying the gains from this pilot and extrapolating them across this rest of the corporation, with offices across the globe, he was easily able to get top managers to listen to his stories. Indeed they became so enthusiastic that they are already planning the systematic deployment of Lean principles across every office function in the company – from sales and marketing to purchasing, from finance to human resources and from engineering to product development.
His other very interesting comment, when asked how difficult it was to translate Lean from the shop floor to the office was: “The more you learn to see the office process, the more it looks very similar to any other process.” Indeed the main differences are all about learning to see – to see who is the customer, what steps create value and where all the waste is hidden. Once you can see you can ask the right questions and build a business case for change. Only then do you reach for the right tools and create standard work etc.
But mapping the office process is not enough. You also need to spend some time figuring out who the customers for this process really are and what they really want. What is their definition of value? In many cases it is that the process itself is invisible and they never have to worry about chasing it! So a key objective is to understand the difference between real demand and what might be called failure demand - all the staff time on both sides spent in chasing the broken process!
One of the first gains from straightening out the office process is that you eliminate the causes for this failure demand. Because it is not supposed to happen the cost is hidden in overheads. The only place it is really visible is in the stress level of your staff! Eliminating failure demand allows them to happily get on with the job they should be doing. Maybe it is time to look for some allies to plant some Lean seeds in your offices?
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