Lean Office? Really?

Last week at the Annual Shingo Prize Conference, I had a chance to talk with Drew Locher, who just recently published a book titled Lean Office and Service Simplified: The Definitive How-To Guide and has previously won a Shingo award for a book he co-authored titled The Complete Lean Enterprise: Value Stream Mapping for Administrative and Office Processes. During our conversation, I asked Drew: "Can lean really be applied in an office and service environment where so much variation exists?" Here is Drew's complete response: Much of the variation found in an office and service environment is "self created." Lean concepts such as standard work, batch reduction, and leveling are just a few that directly address much of the variation that is encountered. For example, the lack of standard work usually means that people perform similar activities in different ways. This creates variation. An individual "batching" a particular activity creates variation in the amount of work that moves from person to person or department to department. For example, if a person performs an activity once a week, then a week’s worth of work will arrive at the next step all at once. Further, if the person performs this weekly activity at different times it creates still more variation for the recipient. From the recipient’s viewpoint, the demand for this work will appear to be very unpredictable. It is due to the manner in which it is processed by the previous person, however, and this can be changed and improved. Now, not all variation can be eliminated. We can, however, often accommodate still more of the variation that remains. Believe it or not, unplanned work can be planned for. We can put aside time for "drop-in" work so that it can be processed in a way that minimizes disruption. Experience has shown that up to 90% of the variation that people struggle with can be addressed by the application of lean concepts. The result is a much more predictable work environment that is more productive and less stressful. Has any reader of this blog tried apply Lean to an office, service, or transactional environment? Do you agree with Drew's comments?


Brendan said...

I don’t agree with Drew’s comments, in fact I think it displays everything that’s wrong with lean in the office. The office is not a manufacturing facility. Standardising work will stop the office from dealing with variety. While Drew thinks variety should be stamped out, John Seddon argues it is the very stuff of service work. If you follow Seddon’s logic (see Seddon 2005 'Freedom from command and control') Drew’s ideas will actually drive costs up.

dennis_cm said...

Interestingly, my real life experience is the complete opposite from Brendan's comments.

I fully agree with Drew. Within our service based organisation, it is only Because we have standardised processes that we are able to have an agile workforce and deal with varying changes in customer demand.

The firm adherence and understanding of standardised process enables us to be creative and deliver what the customer really wants.

Batching causes enormous stress and delays, both internally and for our customers. The classic area being the finance department. (expenses and month end reporting).

The only exception we have is where the fixed external costs are such that limited batching makes sense. In which case the batch size is always the smallest possible to enable us to be as dynamic as possible.

We have the experience that we have driven down costs in the

Tony M said...

I was just doing a task yesterday that I am very familiar with. I realized how much variation I had because I didn’t have a standardized method. I was amazed at how much waste was added because of this. I took a few minutes to set up a standard and it not only simplified the process it made it easier and faster.

I feel that if you can standardize any portion of a job that’s better than zero. Some direct processes may not lead themselves to standardization (like creativity), but the supporting functions (like paperwork) can be.

Dean Bliss said...

I'm with Drew on this one. I think we have numerous opportunities to improve our office work using Lean concepts. The environment is different (as is healthcare, where I work), but the tools are adaptable to any environment. Using observation of the work and adapting the solution to the work flow, anything can be improved. I don't buy the argument that the tools only apply to the factory. I've seen too many examples outside manufacturing of quantum leap improvements to limit my thinking to building widgits.

Brendan said...

Thanks to all three of you for your replies, really interesting. Can I ask you (dennis_cm and Tony M) which services you work in and which specific tools/ideas you have found to work, and could Dean Bliss say more about the value of tools in health?

Jerry Brett said...

Many offices are crying out for the application of lean tools and techniques but you have to modify your approach. Whereas production staff have to work at the same speed, office staff will have varying speeds and don't tend to work continuously. Takt is also more difficult to calculate given that you are not looking at demand for x number of widgets per hour. Standardised processes can help with this. Seddon is right that you can't (and shouldn't) remove variety but standardised work is there to deal with runners and repeaters. You can build in the flexibility to deal with the strangers when they arise. As Tony M has pointed out, much office work consists of basic tasks which support the creative process. It is these tasks which can be standardised. As to batching, this can be circumvented by using the batch as a buffer from which colleagues pull work. In the public sector where I work, I doubt that I'll ever see the total eradication of batching so this would seem to be the best mitigation we can achieve. I have seen lean applied to a lot of office processes with varying degrees of success. I have seen nothing to convince me that lean cannot work in an office environment.

John said...

Variety of work isn't the crucial issue when it comes to Lean in the office and service arena - nor is struggling to standardize an extremely high level of variation in work methods and habits. The key to success is actively involving employees in the process, by providing adequate training in the principles and concepts of waste reduction and encouraging the implementation of improvements at an individual job level.

One manner of doing this is with a "WRAP" initiative (Waste Reduction Activity Process) which extends an applied bonus for fully implemented improvements - Not just ideas, but fully completed iprovements such as the elimination of redundency, fully reducing unnecessary steps within a given business process, improving workplace organization, etc.

The "bonus" involved doesn't have to be something that breaks the bank, so to speak. But it's important to have some level of reward for the efforts extended in completely inserting sound and thoroughly audited results. Plus, the bonus involved doesn't always have to be monetary. Earned time off could also apply, as one example.

Bottom-line: Properly train employees, allow them the freedom to make needed change, then reward them for the effort. The improvements with such an approach can often be astonishing.

Supply Chain Management said...
This comment has been removed by a blog administrator.
logistics said...

In my opinion, process mapping tool can be applied in office environment.

Adam said...

Typically a manufacturing process is a closed system. That is it really doesn't take inputs from its environment (ok it does but at a much lower intensity than a people system). As such these processes are susceptible to improvement through LEAN or other analytical reductionist techniques.

Transactional (service) processes are open. They take many inputs from their environment and also affect their environment with their output. The people in the process are all susceptible to variation from outside the system of control and this can be increased when an initiative is started. e.g. If people fear the initiative then their performance will change accordingly but you will have no idea where that variation will strike, or for how long.

Now you can chase that variation around, analysing root causes etc. but you cannot eliminate it as the variation is created and driven by the very entities you are trying to manage.

This is without going into the following:

Service process has; Low repetition, invisible products/defects, hundreds of key workflows, decision based process, fully joined workflow and information flow, responsive to customer needs (variation), external stakeholders not in company control etc..

Manufacturing process has: High repetition, visible products/defects, dozens of key workflows, fixed business process, largely detached workflow and information flow, responsive to internal cues only, controlled environment etc..

For me the real question should be; why do we expect tools built for the second environment (manufacturing) to be suitable for the first (service)?

They are not and unless the 'experts' start to learn this, initiatives will fail and the brand of LEAN, Six Sigma and LSS will be destroyed.

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