Home > Lean, Operational Governance > Lean Process Improvement / Lean Enterprise – A Key Element of a Pay-as-you-Go Approach

Lean Process Improvement / Lean Enterprise – A Key Element of a Pay-as-you-Go Approach

September 22nd, 2011

I talk to companies every day about how they can best roll out business performance and process improvement programs.  Now, just to level-set, we aren’t zealots here pushing any one-size-fits-all model for programs. We do have some key principles that we adhere to when designing programs though. One of these is that it’s likely not feasible to have a program that builds infrastructure and trains for many months, before ever delivering any quantifiable return. That is simply not the world most of our clients live in these days.   Our philosophy is that it is always advantageous for the program to deliver near-immediate, visible, and quantifiable impact.

When looking at an enterprise, more often than not, we find that basic process management/improvement and Lean (i.e. Lean Enterprise, Lean Process, Lean Manufacturing, Lean Product or any of the other labels floating around out there) can solve a lot of high impact business problems, without incurring high training and infrastructure costs, and are the right place to start.

Lean Process Improvement efforts can yield big results fast, without big investment or big risk …

 

ROI from Lean Program However, I get a lot of questions dealing with how an organization can get started with basic process management and Lean Enterprise, and how to fit in to an overall, enterprise wide process improvement / CI program strategy.    This is a good question in that, in the past, it was almost always preached that Process Improvement deployments (Six Sigma, Lean, etc) had to be top-down.  Start with executives to get support, develop champions, select projects, train black belts, build a 3-year plan, etc, and grow from there.  The challenge with this approach is that it requires a hefty up-front investment and it takes a long time before results are seen.  Read ….. high cost .. high risk!

our new Lean QuickStart powerpoint presentation.

In today’s business climate, this is simply not palatable for a lot of organizations.  For them, an approach that is much less top-down, and much more focused on near term, bottom line results may be far more attractive.  So, here is an approach sequence that I’ve seen effective over and over

  1. Work with business leaders to identify pilot areas of the enterprise
  2. Identify specific focus areas and business cases in that area(s)
  3. Refine those down to a set of well-defined project charters, segmented by the nature of the problem (defect, cost, cycle time, etc), scale, and perceived complexity.
  4. Select a set of low-hanging-fruit projects that can likely be solved in a relatively short amount of time and with basic lean and quality toolsets
  5. Run 1 or more workshops with specific project teams, with specific well-defined projects that can be executed in 2-5 weeks.
  6. Track real savings and ROI on projects, and publicize/promote heavily internally
  7. After one or more workshops, train champions /sponsors and develop a formal project selection and prioritization methodology (see my recent post on this).  Refine continuously.
  8. Continue with more workshops, to a broader segment of the enterprise

Processes are cleaned up, waste and complexity removed, measurement systems are put in place, and real bottom-line results are realized.  Results drive interest and commitment, so it becomes easier to get the broader organization engaged.  For enterprises that have done little formal process improvement work (or a lot for that matter), there will most assuredly be many Lean projects to be executed, yielding fast and consistent results. And, soon enough, larger and more complex problems that require higher level capability (e.g. six sigma) will show themselves.  Then, and only then, do you bridge up to and invest in the next level of capability …. Pay-as-you-go.

These efforts can easily and painlessly run in parallel with and, indeed, support and pay for the broader activities that are required to make the overall process improvement effort successful long-term, namely identifying CTQ measures for voice of the customer (VOC) and voice of the business (VOB), characterizing value streams and establishing process indicators and metrics, building a mechanism to constantly identify high value improvement opportunities (i.e. project pipeline), and constantly defining and executing improvement projects.

Contact me if talk about whether this model could work for your enterprise.

  1. April 4th, 2011 at 23:31 | #1

    Here, here, Eric! I so agree with this simple, down-to-earth approach to improvement. We can waste sooo much time trying to line up all the ducks, and then when they are finally all sitting in a row and waiting for something to happen, no-one has got any momentum or passion left to continue. The organic growth path is just so much more suitable these days, when everyone has no time.

    I take the same approach with setting up organisational performance measurement systems – don’t try and measure top-down and corporate-wide, but instead just start with a performance improvement priority that’s doable now and can lead to easy pickings.

  2. Gururaj
    October 31st, 2011 at 06:11 | #2

    I am pursuing research in the area of quality initiatives likelean. I want to know the various sub parameters that affect a company’s financial, operational, competitive and employee performance. Do you know from where can I access such metrics?

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