Lean Term: Lean For The Office + Lean PDF

Lean for the office?

For many people, the term ‘Lean’, immediately brings to mind images of the shop floor. While it is true that the origin of Lean certainly stems from these roots, there is a rapidly growing movement to develop continuous improvement principles for office and service environments.

So, yes, Lean is definitely for the office. There’s even rumblings of the ‘Lean Six Sigma’ office. (This hybrid mixes in the streamlining benefits of Lean, and the quality improving value of Six Sigma to make an efficient, effective ‘Lean Six Sigma office’.)

Why pursue Lean for the office? Because there is a lot of opportunity. In fact, some even estimate that over 60% of the costs of a product or service come from administrative processes. (Tapping and Dunn 2006) Think about that…

It just makes sense that in an increasingly competitive marketplace, company leaders would explore every new frontier of cost savings. They are constantly searching for any advantage that can launch them past the competition.

Many methods and techniques of Lean manufacturing translate smoothly to Lean office settings. Unfortunately, some do not. Some of the Lean Six Sigma tools need a degree of adjustment to work effectively in the Lean office.

Company’s costs weren’t always skewed towards the office. Part of the reason it shifted in that direction is, in fact, the success of Lean on the shop floor. As Lean efforts reduced expenses, office costs accounted for an ever growing percentage of what remained.

Add in the increasing complexity of product design, IT infrastructure, processes to minimize liability, and the new marketing techniques required to stay competetive, and it is a wonder that the percentage is not even higher. That is why more and more leaders want Lean for the office in order to help reign in costs.

That explains the opportunity, but there is another force at work that is making Lean migrate to the office at an increasing pace. Human nature.

Once people taste success, they don’t want to give it up. When companies make a lot of progress with Lean, they get addicted to reducing costs year after year. Unfortunately, as production processes improve, it often becomes harder to continue to remove waste at the same pace. So improving the Lean office value stream helps leaders continue to feed their desire to have the company do well.

So the ‘why?’ makes sense. The ‘how?’ is a little harder.

If Lean manufacturing is all grown up, the concept of a Lean office is only a toddler, or at most a small child. It really only started to come in to its own as of 2009.

Until then, many of the Lean practitioners who worked in the office were converts. They started in Lean manufacturing, and modified their knowledge to fit into the office. Needless to say, the office is different from the shop floor (we’ll discuss more about why later), so this recycling of knowledge didn’t always go smoothly.

Now, more and more Lean experts are focusing on specific industries, and are building customized sets of Lean office tools. You can find experts on Lean in healthcare, retail, construction, accounting, and even in fashion. There are great opportunities for the Lean office in many industries.

So what does Lean look like in the office? Probably the most noticeable change is the development of a continuous improvement culture. People take more responsibility for making improvements, and for identifying and eliminating waste.

Some other Lean office techniques are:

Ø The morning stand-up meeting. Goals become extremly important in a Lean office. The morning meeting gets everyone on the same sheet of music, as well as provides an opportunity to address problems.

Ø Documentation. The Lean office tool used most frequently to document work is the process flowchart. Regardless of the choice on how to record administrative practices and processes, the key is to get them down on paper.

Ø Cross-training. Once processes are recorded, it is easier to increase flexibility by training many people to do the same job. That way, when demand fluctuates (and it will), leaders can adjust where the team is working to meet it.

Ø Lean office layout. Laying out an office, whether one that directly contacts customers or a Lean back office, requires an understanding of workflow. The goal is to make it easy for people to work together and to keep them from wasting time walking around. This include things like:

o Having multiple small printers and fax machines rather than big ones that teams must walk to. (You might see this in modern medical clinics. Examination rooms now commonly have their own printers so physicians spend more time with patients, and less times needlessly roaming the halls.)

o Using an open office layout with low walls. This improves communication between team members. (Note: there may be resistance because of the increase in noise, especially if team members are on the phone with customers frequently.)

o Standardizing offices. This is probably the most controversial technique for many people. But it follows that if offices are laid out differently, the processes done in those offices are done differently. Plus, standardized offices let people move around more easily if job rotation is put in place.

Ø Implementing flow. Reducing handoffs and limiting batch sizes reduces lead time and improves productivity.

Ø Visual Controls. Use a good system to make things ‘pop’. Active files in a drawer are awful—you can’t see when something needs to be done. On the desk, though, with a big flag on it, a file becomes easy to manage.

Ø 5S. 5S does the same in the office as it does on the shop floor, but should address one major area that isn’t as big of an issue in a factory: computers. Hard drives are like having a massive warehouse. Stuff goes in and never comes out. For the most part, there is little hesitation to keeping everything, since storage space is cheap. Think about that, though, the next time you are looking for a file. People waste an unbelievable amount of time trying to find files, and even more time trying to find other people’s files.

Ø Kaizen, kaizen, kaizen. Both week-long projects and daily improvements are critical Lean office practices.

Regardless of the Lean office tools put to use, one thing should always stand out. The customer. Far too often, ‘improvements’ are made without considering what the customer wants.

This works in reverse as well. Improvements are frequently not made because, “The customer wouldn’t like it.” Surprisingly, in both cases, the customer was never consulted.

Having a good Lean office value stream map will help make sure that teams keep the customer in mind when making changes.

Perhaps the most hotly contested part of developing processes for a Lean office is understanding demand.

First off, understanding exactly what constitutes demand raises an interesting question. Imagine you are in a call center. Your boss might consider incoming phone calls as your ‘product’. What about follow-up emails? Some calls might need them, depending on your industry. Do those count toward the daily workload? Or are they just considered part of the cost of answering calls.

I recommend using this basic rule of thumb. If you want the process to go increase, treat it like demand. If you want it to go down, it is the cost of doing business.

In an order entry group, you want orders to go up. Demand. You want phone calls about status to go down. Cost. For an accounts receivable group, you want check processing to go up. Demand. You want collection phone calls to go down. Cost.

In practice, though, you have to account for the work, even if it is a cost. You just have to keep in mind that you want it to go away. For example, the status calls mentioned above can be reduced by posting information in an online account, or even better, by eliminating the problems causing the calls in the first place.

Once you settle on the items that make up an office’s demand, you then have to figure out how to count. If the average phone call takes five minutes and the average email takes two, you can’t count them the same. The mix would make the pace appear too variable.

The second issue about demand is that once you figure out what your demand is, you have to measure and manage it. On the shop floor, it is done with takt time. In the office, this just isn’t practical. Consider those orders again. An order with two line items on it certainly won’t take the same as one with fifty. You can imagine how hard it would be to stay on track with each and every order.

Instead, use a variation of takt time. Perhaps check progress every two hours. That way, the variations tend to be less visible—the long orders and short orders balance out to the average. It is a much better way to watch the pace.

That opens up a whole new opportunity for the team. When it falls behind, the staff can be adjusted and work can be reallocated to make sure that it can meet its targets. Life gets easier when the group works as a team.

The Lean office shares the same basic philosophies as Lean on the shop floor: relentlessly attack waste, believe that any process can be improved, and focus on flow. Offices do have a few unique challenges that must be addressed, though.

· Most office work is people oriented (either customer or employee), resulting in a greater degree of variability. Processes have more decision points than shop floor work, but they can still be standardized. Don’t confuse a large number of choices and parameters with an inability to add in structure. Computer programs make thousands of choices to get you the information you need. And they do it the same way every time.

· Many people in offices do many jobs. This makes takt time and pacing a process much more difficult than on the shop floor. When a person wears many hats, you will have to decide how her work should flow. In truth, the choice of method to do this matters far less than having a good process for identifying 1) when a person is behind and 2) how to get him assistance.

· Changes are less immediate in the office. Many process improvements involve giving notice to customers and coordination with information technology (IT) changes, both of which tend to make modifications take much longer than on the shop floor. Plan ahead on kaizen efforts to get IT resources. Or, make sure that there is a time scheduled to do the follow-up work after computer programming is completed.

· Administrative processes are entwined with processes in other work areas. Making a change in one area often affect many other processes. Make sure that you know who will be affected when a change is made. Turf wars happen far more in the office than on the shop floor for this reason.

· Flow is less apparent in the office. You are trying to track electrons in a computer versus product flowing through a shop in manufacturing. Because you can’t really see products moving, flowcharts and value stream maps become increasingly important in the office. The dividing line between information and product also becomes more blurry than on the shop floor. In many cases, information is the product (i.e. a loan application or an order.)

· Work doesn’t ‘keep’. Teams can use overtime to build physical products on the shop floor if production falls behind. It is hard to do that in the office—you can’t level-load phone calls. Customers hang up and you lose business. For that reason, rapid adjustment of staffing and short demand windows can be crucial to office work. Demand windows are just the planning period your team is staffed for. A shop floor might plan for a daily output and staff around that. A fast food restaurant may look at hourly windows, and certainly staffs differently for the lunchtime crowd than they do at 9:00 at night.

· You can’t work ahead. In manufacturing, you can build up in advance of Christmas sales. You can’t process those orders before they arrive. This restricts how office teams prepare for projects and training. You have to get creative to prevent problems. Most often this entails working overtime in advance to get all the piles off everyone’s desk, and planning how to split the work of the person who will be out.

In many ways, you face a much larger challenge than people on the shop floor do. You may be losing personal space. You have to be more flexible in how you apply the Lean tools. You often face software limitations that restrict your process improvements, or have to wait forever to get a change done.

Despite this, you have much to gain in Lean. The two biggest benefits you will likely see are:

1. Better cooperation between employees. Work transitions from your work to the team’s work.

2. A more consistent pace. It will likely end up closer to your peak periods than to your lull periods, but you will have fewer of the times where you need to sprint. And when you do start to see the pace increase, the numbers will be there to support getting more help. That’s not to say the pace will be slow. It will, however, be reasonable, and will be based on facts and data.

Adjusting to working in a Lean office will take time. The more you embrace the change, though, the more likely you will be to get compromises on its implementation. Time and time again, I have seen resistant teams have changes forced upon them, while teams that show an openness to new processes get much more say in their own future.

Doing continuous improvement in the office takes a lot of creativity. Just remember this. Focus on Lean principles, not Lean tools. The principles are universal; tools depend far more on the workspace conditions. For example, consider kanban cards. The same card will work pretty much in any manufacturing process. The process for dropping cards and ordering new ones can be, with little adjustment, implemented throughout an organization.

Most Lean office tools need to be configured special for the particular area. Standard Work Sheets don’t tend to be overly useful for documenting a person sitting at a computer. Flowcharts do.

But, the principles—flow, eliminating batching, reducing lead time, identifying waste—can be used everywhere. Focus on those, and modify the tools to suit your needs.

A final word of caution. Many employees, especially those that are resistant to Lean see process information as job security. They may be reluctant to document it. But they won’t say why they are reluctant. It may take a lot of encouragement and observation to coax the information out of their brains and onto paper. Be clear about why you want the process documented, and help them see the benefits for them, not just for the company. If you don’t, you are very likely to reduce job satisfaction and create a disgruntled employee who can slow the pace of Lean progress.

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