Home > Lean, Operational Excellence Training > Applying Lean at an Operation Level for HR, Finance, IT and other Internal Service Functions Can Yield Good Results

Applying Lean at an Operation Level for HR, Finance, IT and other Internal Service Functions Can Yield Good Results

October 21st, 2011

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.

Lean Operations, Lean Management in Internal Services FunctionsTraditionally, 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 silo’d organization?  Does this mean you can’t do anything to get results until significant infrastructure is in place?  I think not.

 

Download an overview of our approach for applying lean at an operations level for internal service functions a short overview of our approach to applying lean at an operations level to internal service functions


We’ve 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 operation‘s 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 don’t 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.

 

  1. October 21st, 2011 at 11:15 | #1

    While the point is certainly valid that this methodology will work, it will still be dependent on org politics and fiefdom factors, correct?

  2. Georg
    October 24th, 2011 at 01:30 | #2

    Can you please point more specifically on what are the crucial differences between Waste Hunt (TM) and the normal Lean routines?
    It is a good new point of view to look at both supply and demand sides. I myself just recently was re-visiting our HR recruiting as a customer and can agree completely that both sides should be targeted.
    However don’t want to stop just at the conclusion. Interesting to hear your point, where the WH should be going further normal lean deployment or taking a different direction?
    Thanks!

  3. April 13th, 2012 at 12:33 | #3

    Any change is subject to the organization’s willingness and ability to change. But how change is deployed greatly effects its ultimate success. We believe the key element to a Operational Excellence deployment is for the effort to be answering specified needs from the business and not for it to be pressed on to the business for the sake of the methodology. We call a deployment based upon business needs a “PULL” system. @david k waltz

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