Our first couple of blogs have focused on our Organisational Development practice, so, to change things up we thought it was time that our Operational Excellence team contributed.
In this blog we will discuss some common lean misconceptions.
Lean can sometimes be thought of as a collection of tools and techniques that can be used in an organisational setting to identify waste (non-value adding activities), the outputs of which can inform improvement initiatives.
Whilst most people would reference Toyota as the inventors of key lean techniques, what is sometimes less understood is that Toyota did not identify and describe the broader ‘system’ elements of Lean that now form part of this method. Toyota placed its focus on its tools and techniques.
As a system, Lean should not be considered as a ‘Technical’ system, it should to be viewed as a ‘Learning’ system. Thus, the supporting tools and techniques that are used in a lean system could be thought of as learning techniques. For example, a Kanban is not a tool or technical system for inventory reduction but a way of learning more about improvement.
As consultants, we are sometimes asked to apply different lean techniques to help our clients identify and agree improvement initiatives. Experience has demonstrated that where this is completed in a single area of the organisation, the benefits achieved are less likely to remain in the medium to longer term.
We have had the most success where we have worked with our clients to help them adopt a systems approach to their use of Lean.
Additionally, whilst cost reduction is often a natural consequence of Lean, it should not be thought of as its primary focus. The purpose of Lean is to increase capacity by designing a system that optimally responds to customer demand.
Finally, we have seen that where our area of analysis has not had any structured improvement applied, Lean can identify the following:
- In a physical product environment (manufacturing or logistics flow) the ratio between key lean activities could be:
- Value Adding activity: 4%
- Future Value Adding activity: 1%
- Support activity: 35%
- Non-value adding activity (waste): 60%
- In an information or service environment, the ratio between key lean activities could be:
- Value Adding activity: 1%
- Future Value adding activity: 1%
- Support activity: 49%
- Non-value adding activity (waste): 49%.
With this potential for waste, it is understandable how some organisations can view Lean as a set of techniques to quantify opportunities for cost reduction and not a system to learn about improvement.