What LEAN is NOT ! ​

Lean programmes can (and have) run into problems when either implemented half -heartedly or implemented or for the wrong reasons. Three examples of incorrect drivers and thinking are given below;

It's a 'cost cutting' exercise

LEAN describes 'creating more value with less human effort, less equipment, less time, and less space'. The correct way to interpret this is that processes are improved to the point where fewer resources are needed to deliver and maintain each process and the resources (human, capital and space) can be redirected to further improvement, growth and new products & services. But often this is misinterpreted as 'lean is mean' where a slash and burn short term approach to cost reduction is taken.

A focus purely cost-cutting is inherently short-term thinking, and will drive incorrect behaviours, as opposed to longer-term value creation focused outward the customer. Whilst overall reduced cost is an anticipated benefit of a lean program it is an outcome of improved quality, better flow, easier and better processes and a culture of learning and improvement. It should not be the driving force.

It's all about 'eliminating inventory'

A reduced level of inventory is often a major benefit of LEAN and Operational excellence programs, however reducing inventory to zero as a primary goal is a serious mistake. Inventory levels are normally there for a reason, they help the organisation avoid running into serious issues such as stock-outs. Inventory should be slowly reduced ONLY once the value stream is truly understood and flow and pull is introduced wherever possible into the supply chain. Doing this will uncover 'rocks' one by one that can be dealt with. Exposing too many rocks at once will lead to a wreck.

It's a way to reduce headcount

Utilising human resource in more effective ways and developing skills and capabilities, to help accelerate business growth are what drives a LEAN culture. One of the quickest ways of 'killing' any LEAN or Continual Improvement culture is to cut headcount after initial improvements are made. No-one really wants to improve themselves out of their job, except where they feel safe knowing that their skills will be redirected to add further value to the organisation. Get it wrong and you can kiss goodbye to any real engagement in the future - leaving you scratching your head as to why its not working (see our blog 'why isn't is working' to get insight into other problems we see with stalled improvement programs).

Don't make these same mistakes when embarking on your Operational Excellence journey or incorporating LEAN. Take advice from experts, ensure leadership teams understand the principles and never forget that your people, their knowldege, skills and vision are your greatest assets. Developing a Capability building and Learning organisation is the true north to accelerating improvement, innovation and sustainable success.

© 2019 INCIGHT Ltd.

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