Applying Lean at an Operation Level for HR, Finance, IT and other Internal Service Functions Can Yield Good Results
Organizations are increasingly adding tried and true Lean principles, tools and techniques to their continuous improvement initiatives to eliminate waste, improve customer satisfaction and reduce unnecessary costs. And rightly so. Successful Lean routinely reduce operating costs 20% – 40% and cycle time by even greater margins, and those cost reductions often go straight to the bottom line.
Traditionally, in applying Lean, trained teams identify then eliminate or significantly reduce the non-value added activities and related costs for specific processes within their operation. But what if there are no trained teams? What if process boundaries are unclear in a functionally silod organization? Does this mean you cant do anything to get results until significant infrastructure is in place? I think not.
Weve found that Lean concepts and tools can be leveraged at a higher, function or operation level very effectively. The good news is that this approach delivers impressive business results on its own in the short term AND sets the stage for even more impactful process level improvements. This is especially true for back office / internal service operations like HR, finance, IT, sales and marketing, supply chain management, etc.
Lean applied at an Operation Level for internal service and back office functions like HR, Finance, Procurement, IT, Marketing and Sales, and Supply Chain Management can make an immediate business impact
The idea is to identify a complete business operations most impactful cost drivers, BEFORE tightening focus to any process/subprocess in the value stream. For those of you that have done Lean at the process level, I know this sounds a bit strange and your first thought may be that the scope will be too big and nothing will get done. But, our experience is that this can work very well and be very impactful:
- It can serve as a front-end audit function, greatly helping to identify next tier focus areas.
- It recognizes and works within functional boundaries that exist in the enterprise, as opposed to attempting to force artificial process boundaries that, while may be desirable, do not exist
- It maps and costs all key value streams of a targeted business function or sub-function, a necessary prerequisite for lower level improvements
- Attacks waste organization wide, in both the supply-side (internal function itself) and demand-side (customer, consumer of the output).
- It consistently identifies low hanging fruit opportunities that can be realized immediately
- It can be used to jumpstart a new lean initiative or address unrealized opportunities from earlier lean events.
Lean Operations (lean applied at an high-level operations level) can definitely be a powerful tool for enterprises that are looking for immediate cost savings and/or performance improvements in internal service operations, but dont have the desire/bandwidth/budget to start up a formal Continuous Improvement program. It can be applied to an entire operation (e.g. HR, finance, Legal, IT, etc) in a relatively short time period, and it does not require a big investment in training and infrastructure. For those organizations that do want to move to a more structured Continuous Improvement program, it can be an excellent way to jumpstart a BPM, Lean, Six Sigma, etc. program
Need to improve performance or lower costs in internal service functions like Human Resources (HR), Finance, Procurement, Supply Chain, IT, Marketing and Sales, or any other back office type function? Contact me to learn more about our approach to applying lean at an operations level.