Lean: achieving critical mass.

AuthorKavanagh, Shayne
PositionCover story

Progressive governments are always looking for ways to serve their constituents more effectively and less expensively To that end, many governments have begun exploring the efficiencies Lean practices can provide. Lean thinking and methods have made their way from private industry to the public sector and appear to be having a powerful impact on many government organizations. Based on several years of research, the GFOA sees a potential for public-sector entities to achieve significant value from adopting Lean. Using Lean techniques to reduce waste allows public managers to operate more cost effectively, maintaining the quality of the services offered, along with a high level of respect for the people--the public servants--who deliver them. This article reviews the main questions public managers might have about Lean, explaining the essential elements of Lean, why Lean is so well-suited to government operations, and how to begin implementing Lean practices.

WHAT IS LEAN?

Lean is a system of thinking and way of working that emphasizes reducing waste in both time and material costs while providing the same, or enhanced, value to the customer (e.g., a citizen or another department). Lean is often thought of as a process improvement method, known for its expansive toolset for improving efficiency and effectiveness in the workplace. And while those are perhaps the most tangible benefits, the true power of Lean is its ability to transform the culture of an organization--encouraging an entire workforce to work together as they strive for continual improvement. In that state, Lean is no longer a project to be completed; it has been ingrained into the DNA of the organization.

Lean evolved from total quality management and the manufacturing practices of the Toyota Motor Corporation. Toyota's methods were thrust into the popular consciousness and dubbed "Lean" by a global study of automotive manufacturers, performed by the Massachusetts Institute of Technology. (1) From there, its use has spread to manufacturing companies more generally, and then to organizations in the service industry, including government. In the last few years, the GFOA has observed increasing interest in Lean among governments (2) as budgets tighten and the need to perform services better, faster, and cheaper has become paramount.

Put in the most basic terms, Lean is an evolution beyond the Industrial Age standard of mass production. Exhibit 1 summarizes some of the major differences. The rest of this article will explore the finer points of what comprises Lean.

CORE CONCEPTS OF LEAN

The starting point of Lean is to think in terms of how work creates value for the customer. Value is a product of quality, cost, and timeliness. Lean encourages one to understand who the customers of a process are and what they expect from the process. Only then can one begin to improve the value those customers receive. For example, a restaurant health inspection service dramatically improved its results when inspectors realized that restaurant owners are often as interested in food safety as inspectors, and any failure to provide safe food was often a result of insufficient knowledge or skill, rather than intentional neglect. This led the inspectors to schedule food safety assessments with new restaurants when they first opened to ensure that owners were aware of safe food handling practices. Proactively addressing food safety with new restaurant owners allowed inspectors to ingrain essential practices in the restaurants' culture from the beginning. The incremental cost of the training was more than offset by discontinuing "routine" inspections that were unrelated to the actual risk posed to the public by the establishment being inspected. (3)

Lean authors and researchers estimate that in a typical American firm, only 2 to 10 percent of workers' time is spent on activities that add value for the customer. (4) The implication is that an overwhelming proportion of time is spent on activities that don't add value, or waste. The concept of waste is core to Lean, which aims to discover root causes of waste and eliminate or minimize them. In fact, Lean categorizes eight types of waste, helping employees more easily recognize it. The eight forms of waste are: (5)

* Defects. When incorrect work is sent to the next step in the process or to a customer.

* Over-Processing/Inspection and Checking. Over-processing is putting more work into a product or service than is necessary to meet customer requirements. Inspection and checking is a particularly prevalent form of this waste, especially in government.

* Waiting. Idle time created when employees (or customers) wait for information, physical items, and so on. Wait time equals downtime.

* Inventory/Backlog. The sum of all tasks waiting to be processed; also includes physical inventory.

* Transport. Transporting anything that does not directly add value to a final product or service is a form of waste.

* Motion. Excess motion in completing a task causes waste.

* Over-Production. This results when a product or service is provided in greater amounts than necessary or has more features than are necessary.

* Underutilizing People's Abilities. The most insidious form of waste is failing to make use of employees' full talents, skills, and knowledge.

Exhibit I: Mass Production versus Lean Mass Production Batch Processing. Work is processed in large batches before moving on to the next step. Push. Work is produced regardless of the demand for the (product from the next step, in the process. Reactive to Change. Change in work only happens when management requires it. Control. Management's job is to make sure workers stay on task. Functional. Work is compartmentalized into departments and divisions. Fix Problems. Problems must be fixed as quickly as possible so that work can move down the line. Manage from Data. Use data to understand how work is proceeding and to make decisions. Lean Continuous Flow. Work moves continuously along the process with minimal or no interruptions; time spent in inventory or waiting is minimized. Pull. Work is produced only upon a signal that the work is needed. Adaptive to Change. Change often happens as a result of worker initiative. Enable. Management's job is to make sure standards are clear and impediments to good work are removed. Process. The business process is the primary unit of analysis. Departments are secondary. Learn from Problems. Problems must be solved in a way that prevents recurrence. Use Data, but Rely on Observation and Experience. Data are important in finding anomalies and...

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