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How Lean is Your Administration or Service?

Often you will hear an organisation talk about being 'lean' they have lean processes, they have driven down the waste in their systems, they have 5s and Kanban's and management by walking around, everyone is clear on the goal and so many more great things happening, in their manufacturing area. Yet take 10 steps into their offices, their service or admin area of the organisation and guess what, there is zero lean thinking happening here. The organisation then has a pocket of lean which just happens to be in their manufacturing area, but they are not truly a lean organisation.

Spotting Waste 

Can you spot the waste in your Administration areas?

Waste is fairly easy to spot in manufacturing areas, in some cases you can quite literally fall over it and it's the area that gets all the press. Yet there is a huge amount of waste in the non-manufacturing areas of the organisation as well, some studies suggest up to 80% of the waste lives here! So why aren't organisations looking here?

If we split the organisation in 2 sections, lets call everything that happens before manufacturing administration (you could call it service) if you time how long it takes to get a sales order into your system, processed, specified, into your ERP system (if you use one) perhaps designed, parts purchased, drawings done and the myriad of other things that happen to deliver what is needed to the factory so they can turn it out in record time, there is a lot of steps there, lots of stuff that needs to happen, so maybe it looks like this:

What If You Applied Lean Thinking?

Now, think about your admin side of things, from a lean waste point of view, how much handling, rework, reverification, and other things can you think of, how is the 5s while you are there?

What tends to happen is that 'things happen' in the admin side, maybe the sales order needs to be rechecked, the specs need reconfirmed, you are on stop with a supplier because finance didn't pay. The effect is that the release to production date moves to the right, the delivery date however doesn't. This means you need to recover the situation to meet the date so you put in a chunk of over time and what do you know you make the date.. but at a cost. What's worse that cost is shown in the manufacturing side of the fence when it's a cost created by the late delivery of the product, in this case the information, from the Administration side of things. So really your administration costs of a product are not fixed, they are in fact variable because your processes are variable, and they are impacting on your lead time!
By implementing lean processes in your administration areas as you remove the waste in these areas the information flow to the manufacturing side of the organisation improves, mistakes are reduced, waiting times are reduced and over all product lead times are reduced.

The 5 Core Principals of Lean

 Over the coming weeks, we will be talking about how the 5 core principals of lean:

  • Value – as seen from the customer's point of view
  • The Value Stream – which parts of the product lifecycle actually adds value for the customer
  • Flow – how things move from one part of the business to another and to the customer with zero waste
  • Pull – This is what drives flow, nothing is created before it is needed
  • Perfection – Driven by continuous improvement how to avoid and remove waste
The principals can and should be applied to the service and administration areas of your organisation which in turn will dramatically improve your ability to deliver better products at far better lead times and at lower total costs, what will that do for your organisation? what will it do for your Customers or even your Competitors!?.

Now, are you interested in lean Administration? StayTuned!

Ready To Start Your Lean Journey?

Make a booking now and find out how we can help you Make Things, Better

Ready To Start Your Lean Journey?

Make a booking now and find out how we can help you Make Things, Better
Value Stream Mapping is a Team Sport
Lean and Your True North

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Wednesday, 02 December 2020

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