Orca Management Advisors Services

Principles of Lean for your Business

The principles of lean are based on a single tenet.  People and processes are inexorably connected.  People need processes and processes need people.  The two are interdependent. Neither can function without the other. As the principles of Lean recognize this interrelationship, they underlie our operations consulting approach.

A Brief History of Lean

At the conclusion of World War II, Japanese raw materials had been depleted and money and workers were at a premium.  It was in this environment that Taiichi Ohno was asked to build the automotive manufacturing business of Toyota Motor Company. Noting that during the height of the war, Ford Motor Company manufactured a new B-52 bomber every ever hour, he looked to Henry Ford and American production techniques for inspiration.  Eventually, many of the manufacturing techniques of Henry Ford became the inspiration of Toyota’s manufacturing process.

However, Ohno had a challenge to overcome.  The war created in Japan, significant limitations on raw materials and workers. Ohno recognized his need to minimize waste in the manufacturing process and maximize that which was available.  In minimizing waste however, he had to identify that waste. In meeting this need, he created seven models of waste identification. Among these identifiers included delay in production, activities which added no value or were unnecessary in the manufacturing process, and defects in the end product. Once identified, solutions for eliminating the waste could be created and implemented.

There was, however one aspect of Ford’s technique that troubled Ohno.  Ford failed to recognize the interdependent relationship between people and process. Ford workers therefore, played no role in improving processes.

Ohno, on the other hand, recognized the relationship of people and process and forever revolutionized process and operations. Unlike Ford, Toyota encouraged workers to be part of the production process. Creating quality circles, workers were encouraged to present to management, input for improving the quality of production. Now referred to as the Toyota Production System, it is recognized as the inspiration for Lean management and remains the gold standard for eliminating waste and promoting efficiency in the manufacturing process.

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By the early 2000’s, cutting edge service-sector businesses recognized that they faced some of the same production challenges of manufacturing-sector businesses. Among them, delay, non-value activities, and defects in work product. Recognizing the value of Lean, these forward-thinking companies began integrating its principles into their processes.

Principles of Lean

Put the Client First

From the prospective of a client, determine what creates value for that client.  Identifying this value is the trigger-point for all subsequent performance by your company.  Every step of the workflow has one objective.  Creating that value.

Identify the Steps Needed to Create Value

Identify all the steps in the stream of workflow needed to create the client values.  Any action performed in the workflow stream is aimed at creating value for the client.  Any step that does not meet this criterion is wasteful and detracts from the client’s value.

And we are reducing the time line by reducing the non-value-added wastes.

~Taiichi Ohno, Pioneer of TPS

Develop a Workflow Stream for Creating the Client's Value

Design a system for the logical transition of the steps necessary to create the client’s value.  Eliminate any step in the stream that adds nothing to that value.  Define the role of each individual in the stream.  Choose the best qualified person to perform each given step.  Empower employees through their inclusion in this process.  Allow each person in the stream to communicate their expectations and the expectations of others.

Reduce Inventory

Ideally, as a given project weaves its way through the workflow stream, work should arrive just in time for each person to perform their task.  This efficiency cuts the time necessary for completing tasks.  If, on the other hand, a person receives their work too soon or too late, this is indication of a bottleneck within the workflow stream, adding time needed to complete the project.  Projects back up, revenues drop and client dissatisfaction and employee discontent rise.

Strive for Perfection

Lean is a process, not an event.  It requires vigilance, regular evaluation, and identifying and removing the wasteful steps in the workflow stream.  

Lean's Application to Service-Sector Companies

Lean service-sector companies focus on the values of people and the value of worker, placing client values first and placing greater value on their people.  In addition, Lean service-sector companies

  • Increase Revenue
  • Complete Projects Quicker
  • Improve Throughput Rates
  • Reduce Mistakes
  • Ensure Client Satisfaction
  • Strengthen Client Retention
  • Increase Client Acquisition
  • Enhance Employee Engagement
  • Boost Office Morale

When properly done, the integration of Lean into a company creates a singleness of purpose shared by a cohesive organization.