Lean management is sometimes perceived as a mindset that solely emphasizes efficiency. However, more importantly, it focuses on creating value. Efficiency certainly matters, but above all, a company must identify what creates value from its customers' perspective and what they are willing to pay for. This shifts the entire logic of efficiency thinking - in Lean management, it's not about running faster but about running smarter, more directly towards the goal.
It's important to understand this philosophy as a long-term exercise that gradually changes actions so that they can produce what the customer values. I call it a philosophy because ultimately, it refers to the underlying logic of the entire operation, not just improving performance on individual tasks. In the first part of the blog series, Lean principles were introduced, which gradually transform the company's operations to be more value-centric.
What is value then? In Lean, value is often defined not only from the perspective of creating value for the customer (value is what the customer is willing to pay for) but also inversely, by what it is not. The ability of a process to create value improves when sources of waste are systematically eliminated, i.e., when value is not wasted on unnecessary activities (or waiting!).
In classical Lean literature, there are seven sources of waste, and in recent years, an eighth waste has been added. This last one will have its own discussion in the blog series, in the final part, so it will not be extensively covered here.
The sources of waste that Lean thinking aims to eliminate from processes are:
Sources of waste 1 (unnecessary motion), 2 (unnecessary transportation), 4 (overproduction), and 5 (inventory) are of a nature that may not be as strongly manifested in the non-physical goods world. However, even in service production, where a customer arrives at a service point, at least the first two can be applied. Solutions often involve some kind of single point of contact service points, minimizing customer effort and speeding up the service experience. Usually, services cannot be stocked, but there are exceptions to this rule.
Overprocessing is one of the most crucial sources of waste from the perspective of this blog. Overprocessing covers all activities in a process that do not actually contribute to the direction valued by the customer. The key to eliminating overprocessing lies in understanding the customer's preferences precisely. Efforts should be made to actively identify those factors that create value for the customer, so that operations can be focused on delivering these. This also relates to a practical tool introduced later in this blog post.
Waiting is a source of waste that may initially seem like a necessary part of operations. In many cases, not everything can be available instantly when the customer desires it. However, operations can be organized in various ways, and from a Lean perspective, the focus should be on maximizing the flow of value to the customer. Therefore, ideally, services should be available to the customer at the time that best suits their needs. Especially in digital services, this is often easily achievable.
Example:
If, for instance, you offer a software product that requires some learning, you can provide basic technical training with ready-made, high-quality videos and offer a shorter Q&A session related to them at a time convenient for the customer, booked through an online calendar.
Suppose you previously offered this service by scheduling a 2-hour initial training session based on the trainer's available time, and the implementation often extended to 2 weeks due to time constraints. In the Lean process, the customer essentially receives the same knowledge through videos and a separately booked, but shorter (30-minute) Q&A session. 30-minute time slots are typically easier to find in a busy trainer's calendar and closer in time.
This way, the turnaround time for this (onboarding) subprocess was reduced from, for example, 2 weeks to two days. The customer seemingly gave up a bit of the service offered directly to them but received the needed service much faster in return. Most likely, this exercise increased their perceived quality and satisfaction. Of course, following the same logic, the next step could be aiming for training-free, completely intuitive adoption, but that would be a matter for further development!
Defects and inspection are also essential aspects from the Lean perspective. The basic idea is that each task should be done right the first time. Correcting a faulty product or service and even inspecting whether the service was faulty are wastes from the perspective of process benefits. By standardizing the process, progress can be made gradually towards a more perfect service capability, although it should be kept in mind that when humans are involved in the process, errors can occur. One key is to increase automation, which helps deliver customer value with minimal variance.
Wasted information and talent are, as mentioned, newer additions to the Lean canon, and they will be discussed in a future blog, so we won't cover it extensively here.
For the sake of simplification, let's assume that you have already organized your operations in a process-oriented manner to create value for your customers, rather than functioning based on functions. Let's do a small exercise.
Next, let's implement a practical tool for developing Lean processes. Every company's processes are different, but you'll surely grasp the idea. This exercise is suitable, for example, as a Kaizen group exercise introduced in Part 1 of the blog series, if you have a moment to spare for identifying improvement opportunities. I encourage you to involve the owner of the process to be developed and practical workers, if not even customers. Through the group exercise, process value creation bottlenecks can be identified and ways to address them can be found.
That's all for now - in the next part of the blog series in week 13, we will discuss Lean from the perspective of quality assurance and the practical tools supporting it.
Regards,
Janne Vainikainen, Zeffi, COO, Lean Six Sigma Black Belt
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