Make your organization more efficient and profitable

Many organizations do not realize whether they are already running in efficient mode or inefficient mode. Some was thinking that their business process is already efficient, although it is not true. Many managers think that they have been running the business the way it is for many years, and they were seeing no reason for changes. They believe this because their business has survived for many ages until now. This kind of idea will halt implementation of any improvement methodology, and will endanger organization in the future as they need to be more competitive.

Statistically, major resistance in implementing an improvement program is dealt with reluctant from employee rather than technical aspects. Hence the top management support and commitment is the key to successful implementation of any improvement program.

Lean strategy has been originally derived from Toyota Production System. This strategy has promoted many organizations to achieve most efficient process by eliminating all non value add activities. It applies in small scale organization up to giant industry. In lean principles, organization are pushed to strive to eliminating eight deadly waste namely transportation, inventory, motion, waiting, overproduction, overprocess, defect/rework, and non utilize employee. All of this waste will only give burden to your process but not adding value to your product or service. Your end customer is not willing to pay for all of these, instead will add organization operational costs. As operational cost increase, it will impact to organization profitability. If the profitability decreases, the product or service offered will not be competitive.

Lean is most adopted strategy originated from automotives and then later implemented in various industries such as manufacturing, transactional, transportation, sales, and many more. Key lean principles are:
Define value from perspective of end customer
Identify value streams
Flow
Pull
Strive to perfection

Value is determined by end customer. It is what customer willing to pay for. We should evaluate all process and identify whether the process is value added. There are many process which is considered as non value add activities, they take time, space, and resources but giving no value add to the product or service. Examples of this activity are rework, scrap product, setup time, document waiting, searching for tooling or document, machine downtime, material transportation, approval bureaucracy, and others. Typically there are many activities will fall to this non value add categories, they will make process not efficient and add more cost to product or service.

The method to implement lean strategies begins with top management commitment. Plan and preparation is required to create team to work on continuous improvement at selected area. Next, after the value is well defined, all wasteful step is need to be eliminated or reduced. The idea of flow is to make steps from raw material to finished good can flow continuously without material waiting (work in progress between process) by implementing one piece flow or batch size reduction. This will reduce overall leadtime dramatically. Pull is philosophy is to draw material from end process based on customer consumption instead of traditional push systems which push or introduce material from first process step to subsequent process and have risk of being overproduction and material waiting. And it will surely prolong the manufacturing leadtime or service leadtime. Strive for perfection is continuous improvement instill in every employee heart to make process even simpler, preventing mistake, and make process more efficient.

The fundamental of lean principles is making organized workplace by implementing 5S. The purpose is to make workplace area more efficient by eliminating searching, unnecessary transportation, error, defects, and other waste. Visual control at this level will help everyone can instantly spot if there is abnormality happens in the process. Such that the corrective action can be instantly taken. Visual management is implemented through glass wall whereas all key performance indicator and improvement project is displayed in production boards to make target become clear to everyone up to shopfloor level.

Others lean tools such as single minute exchange die, total productive maintenance, replenish pull system, mistake proofing, level loading, batch size reduction, are designed in such a way will help process to be as efficient as possible and make process faster, create better quality product, and produced at lower cost.

Lean can achieve tremendous success if all employee support this program and realize the benefit. Managers also required motivating and guiding the team to accomplish improvement. Program can begins with Kaizen Blitz (Quick Improvement) where team are selected and isolated from their regular job to be trained and executed improvement directly on production line during 5 days under guidance from Lean Champion. While Kaizen Event is scoped by top manager assigned to Kaizen team to identify waste in that particular area and make all necessary improvement.

All in all, lean principles can be applied to any organizations and create abundant cost reduction and make business process more efficient. Ultimate purpose of lean is to build improvement culture in every employee so that the company can gain competitive advantage. This will help organization to be more profitable and use it for business growth. Have your organization implementing lean?


By: RIYANTONO (BUSINESS PROCESS IMPROVEMENT CONSULTANT)