The next generation of lean: concept can be improved--but only if all floors are in synch.

Author:Piotrowski, Kevin
Position::Managing for tomorrow
 
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For years, companies have worked to implement lean initiatives focused on factory production improvements in an effort to lower costs, increase customer satisfaction and enhance quality and operational metrics. But can the concept of lean manufacturing be improved upon? The simple answer is yes, but only when a company adopts a cross-functional mindset that creates lean processes extending beyond the shop floor--and all the way to the top floor.

Lean is a cultural and people-oriented initiative, so applying lean tools, new technology, and new business processes to a traditional silo-oriented culture will not be successful. The key to making the transition to a lean organization is implementing fundamental change in the corporate culture to foster cross-departmental teamwork and communication up and down the entire organization.

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A three-layer approach

Successfully implementing a company-wide lean initiative can be viewed as having three essential layers:

* Value stream layer

* Improvement layer

* Strategies and tools layer

Companies typically adopt one or more of these formal practices believing that they then will be operating in a lean fashion, but this only produces isolated improvements instead of long-term results. It is the sum total of all three elements and the synchronized relationship between them that makes a lean initiative effective.

Additionally, the application of lean across more than one department is necessary if a company wants to sustain the results.

Technology plays a vital role in helping a company maintain its lean practices, but first a company must evaluate, and possibly augment, its service and supply processes.

The value stream layer, sometimes referred to as value-stream mapping, consists of streamlining and optimizing specific processes or activities, such as order to cash, procure to pay, attract to perform, and accounting to reporting. Companies must define and optimize the way they respond to customer demand and how it adds value to ensure customer satisfaction.

Within this layer, the company defines the value stream through a cycle that includes:

* Defining value based on the customer's viewpoint

* Mapping the value streams for all processes serving internal and external customers

* Making the activities flow efficiently

* Responding to customer demand

* Continuously improving the processes based on feedback

Value stream activities should precede the implementation of a business...

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