LEAN does not stand for ‘Less Employees Are Needed’

CEO/Lean Management Consultant and Corporate Trainer, Thilak Pushpakumara

People are the key to become a lean enterprise and lean is all about people and the way they use technology, tools, techniques and practice principles to eliminate waste, variability and inflexibility.

Lean is an integrated set of principles, practices, tools and techniques designed to address the root causes of operational underperformance. 

It is a systematic approach to eliminating the sources of losses and waste from the entire value stream in order to bridge the gap between actual performance and the requirements of customers and shareholders. Its objective is optimising cost quality and delivery while improving safety. 

To meet this objective, it tries to eliminate three key sources of loss from the operating system. It is waste, variability and inflexibility.

Waste is any activity which absorbs resources but creates no value. Traditionally seven types of waste such as overproduction, waiting, motion, transportation, over processing, inventory and defect and rework have been identified. 

The failure to utilise people’s skills and intellect to enhance the performance also added as the eighth waste. 

In addition to that industry specific waste was also identified and some are unique for some industries.

Variability is any deviation from the standard that detracts from the quality of a service or product delivered to the customer. 

There are five sources of variability; skill, process, material, information and environment which lead to productivity losses or process bottlenecks that prolong lead times.

Inflexibility is any barrier to meeting changing customer requirements that can be overcome without incurring extraordinary cost. 

There are four types of inflexibility in a business. It is volume inflexibility, product inflexibility, mix inflexibility and delivery inflexibility.

Eliminating waste helps to reduce cost; eliminating variability improves quality; and eliminating inflexibility optimises delivery. But this is an oversimplification; in practice the interrelationships between objectives and sources of loss are rather more complex.

There is a factory within the factory. To unmask the hidden factory we have to understand how much potential lies hidden and you have determined that extracting hidden potential is economic, you need a stable platform to bring it to the surface.

To lay a solid platform companies need to tackle three aspects of an organisation simultaneously; the operating system, the management infrastructure and mind set and behaviour of the staff.

The people who know the organisational culture, your process are very good ingredients to transform your company to a lean enterprise. 

If you focus on people reduction as a result of lean no doubt you will antagonise your people and end up with a crisis situation. 

If you compare the cost of people to the business and cost of waste, variability and inflexibility it is unbelievable. 

Typically management can see less than 5% of actual waste in the company. 

To see all waste in the whole value stream we need to train and influence the paradigm of our people who know the process. 

If you feel that you have more people in the organisation than required, utilise them to identify and eliminate waste, variability and inflexibility. 

Once you eliminate them you will have more opportunities in the market because you have improved quality, cost and delivery. 

When there is a growth in the business you need more people. 

You can utilise your excess people to fulfil the new requirement which was created due to new business opportunities.

This is a continuous journey. So invest in developing people before investing in capacity, technology and consultant.

The best consultants are your employees. So listen to your people because they can feel the pulse of your machine and process. Most of the organisations go behind the sweat of human but lean organisations go behind the brain of their employees. 

Once you tap the power of people and develop them as lean practitioners, you will never feel that they are not needed even though they are excess. Some organisations have more people than the requirement. 

It is mismanagement and you need to re structure your organisation. 

If you bring lean to address your miss management people will misunderstand lean management and they reject lean philosophy.

Understand lean philosophy before practice to make your lean journey a great success.