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How Lean are You?

November 29th, 2012

You’re talking to a friend and they say “I work at a lean company” or “my boss wants me to do lean in my department”.   What comes to mind?  There isn’t a specific measurement for lean.  There aren’t sigma levels.  So what does it mean to be a lean company or to run a lean process?

There is a central theme or definition.  One can describe a lean company or process as a streamlined, high quality system that produces finished goods or service deliverables at the pace of customer demand with little to no waste.  But there aren’t any metrics in that description.    So we have to go further.

First, let’s recognize lean is multi-dimensional.  It encompasses a wide variety of management techniques.  They aren’t interdependent but, in the perfect world, but they are integrated.  Of course, we don’t live in a perfect world so organizations apply different combinations of the techniques at various levels of integration.  Their level of satisfaction with results may be the ultimate determinant of how far they go in introducing and integrating the various techniques.

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The point being that while you can’t declare “this service is completed in three hours therefore it is lean (or it isn’t lean)”, there is a level of behavior that evidences lean.  And that behavior can be modeled and, to a certain extent, measured.  In other words, you can act lean and even determine how lean you’re acting and how well you are acting lean.

This isn’t to say you shouldn’t measure performance or that measuring behavior is more important than performance.  Not at all.  You should still hold performance relative to customer expectations, stakeholder requirements and competitor performance as the final report card.  But if you need to close a gap and you wish to either introduce lean or push its use farther, you can examine your application of lean.

So given the number of components and the complexity of any interrelated systems, how can you gauge where you or your organization lie and how you can optimize your next effort?  I’d argue you begin by examining how many of the various techniques you currently apply and how completely you apply them as measured by their various components.

I’d start by creating the categories that all contribute to a lean organization separating them into two spheres – internally and externally oriented lean practices.  Internally oriented practices include JIT, Production Flow, Set Up Time, Use of Quality Tools and Employee Involvement.  Each of these has different practices, tools and techniques and you can evaluate their use.  Then there are the externally oriented lean practices such as suppler and customer programs.  Again, each has their own practices, tools and techniques and you can evaluate their use.

Once you’ve created a master inventory, you can look at any portion of the organization or even process and determine which are being used and which aren’t.  You can also examine the depth to which they are being used.  Thus you have a gap analysis in how lean you are acting.  Once again, the purpose isn’t to be the uber-lean organization.  The objective is to satisfy customers/stakeholder and thereby profit.  So you look at the performance gaps relative to those requirements as the guiding light.  But when you think how to close that gap, you can examine how lean you’re acting in that area to determine if you can move the ball forward by acting or implementing more lean principals.

The point of all of this is to understand that even though there isn’t a measurement to the statement “we are lean”, there is an evaluation.  And such an evaluation, in concert with an examination of performance gaps, will tell you if there is an opportunity to do better by diving deeper into lean.  And a framework of the principals will tell you where the biggest bang for the buck exists for the marginal investment of time and effort.  So in the end, while there isn’t a measurement, there is a way to determine how lean you are and how much more you should be to improve your organization or process relative to expectations.  And that is what you need to improve which is the ultimate goal.  If you wish to discuss, contact me.

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