Lean management: Competitiveness driver for any business
LEAN Management system is a relatively new form of management system aimed at improving operational performance and is applicable in any organisation that wants to create more value for its customers, eliminate waste and improve competitiveness.
It originally started in manufacturing and the first company to really to make a big success of it was Toyota.
CZI hosted a three-day Introduction to Lean Management workshop last month in Harare, where a lean management specialist, Anton Grutter the CEO of Lean Institute Africa conducted training for senior executives drawn from CZI membership. He went on to do the same training for CZI members in Bulawayo.
What came out clearly during the training sessions with Grutter was that in order to make Lean Management work in any organisation on a sustainable basis, there is need to change a lot of the elements of traditional ways of managing and how they work together to deliver products and services.
The basic point of departure for any business implementing lean management is to focus on creating value for the customers, hence the need to clearly identify the process steps that create value, and those that do not create value, that is what can be regarded as waste and eliminate them. In operations management, focus is on all kinds of different processes such as manufacturing, administrative, commercial and some of the activities in these processes do not create value for the customer. Lean management question the way things are done with the aim of making fast even flow. This could be materials in manufacturing or information in an IT system, or people in a hospital. Whatever is being worked on, the aim is to make the process flow. Therefore, if there is a hiccup in the process, one should find what the obstacle preventing it from moving forward, and then eliminate the obstacles to get the process flowing.
Lean management also involves making the customer wants something only when that customer wants it. What that boils down to is matching capacity to make the products or services with the rate of demand of the customer. The challenge is that demand fluctuates while capacity is often difficult to change in the short-term.
Another important aspect is striving for perfection and that comes through continuous improvements.
Dr. Grutter said, “Perfection is not something we ever achieve, but we are continually trying to move towards perfection so that we become better all the time.”
It is important to highlight that in each sector there are specific techniques and approaches that are useful in the kinds of processes used. In manufacturing the advantage is that one can actually be in the factory to see the process and see whether things are flowing. One is then able to identify the defects and put in place mechanism to address the problems. Services can be more challenging because a service is often intangible and needs to be delivered in front of the customer.
The human element in lean management
There are two sides to lean management systems, that is the technical process side and the other side is to build the capabilities of the people. Technical side often fail because the people involved in the actual process have not been brought on board. The other problem is people have habits that are hard to change. Often people get into senior positions by being directive and this style of management is inconsistent with the lean way of management. What is necessary is for managers to learn how to empower and develop their people. This is done by giving workers problems to solve and ask questions that make people think, rather than telling them what to do. Also, senior management need to lead the way by practicing new ways themselves to show how it is done.
Applicability of Lean management in the Zimbabwean manufacturing sector scenario
Zimbabwe’s manufacturing sector is characterised by expensive credit and old technology and equipment. However, lean management is particularly suited for these kinds of circumstances. The starting point with respect to technology is to do the best that can be achieved with what one has. The idea that technology solves all problems is not always true. That’s not in any way to say technology is not important, but it’s about getting value with what you have before spending big money. With lean management a business can get to 40 percent, sometimes even more, with improvement in operational performance over time.
There is common misunderstanding that lean management is only about elimination of waste. What needs to be understood is that in the first place, it is about creating value for the customer and then about elimination of waste. It helps in improving competitiveness organisations, but competitiveness is not just a cost issue. Lean management looks at other ways of creating value, like quality, delivery, flexibility and service which are also drivers of competitiveness.
Challenges faced in implementation of lean management
Organisations trying to implement lean face the challenge of buy in. At lower levels of the organisation, buy in is less of problem, but at senior levels it can be more of a problem. At lower levels in the organisation, shop floor workers might be sceptical initially, but once they discover that lean management works by making their work easier and quicker to do and that it is an opportunity to work not only with their hands but applying more of the brain as well, it becomes more appealing.
For senior management, the challenge often is inadequate time to support their people to do improvement work as there may be other important things to focus on. When the CEO shows management how to be a lean leader, they become master coaches and is the key part of how to institutionalise lean management.
The other major challenge is the need to realise and appreciate that lean transformation is a journey that requires fundamental changes and does not bring about quick fixes. Lean management is a process and it takes time to deliver the results.
CZI will be conducting more training workshops in the near future.
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