Taking Lean Beyond Manufacturing

	Bookmark This Page Email This Page Format for Printing Submit an Article Read More Articles
	Related Tools & Articles Lean in Outsourcing

By Karen Watterson

I'll start with a confession. It was the title that grabbed my attention: The Hitchhiker's Guide to Lean. I'm a big fan of the late Douglas Adams and his The Hitchhiker's Guide to the Galaxy. So when I saw Jamie Flinchbaugh and Andy Carlino's book, wedged among other business books at a local bookstore, I pulled it out to look at the cover, and then the copyright page (2006). What? A new book about Lean? Wasn't lean passé -- one of those trends, along with downsizing, re-engineering and quality circles gathering dustbunnies under some consultant's bed?

Not according to the authors.

I read the 200-page book in an afternoon and was inspired enough to take notes. (I have Master's in Management and remembered learning about Lean when the Japanese auto industry began its assault on GM, Ford and Chrysler.) So I was curious: Could the lessons of lean be applied to IT and outsourcing? Was there a relationship between lean principles and agile programming? What metrics could IT shops use to measure their "Lean Quotient"?

Lean Tip #1. Is it smart to outsource problems? It can be, if you and your service provider agree to work as partners, figuring out where the problems are, and tackling them in terms of processes and flows. That's where the service provider can add value, perhaps brainstorming you out of some comfortable ruts. On the other hand, outsourcing the "bad" and having that simply replicated by the service providers just adds more handoffs and probably increases waste.

The nine-chapter book starts with an overview of the authors' five principles of Lean:

1. Directly observe work as activities, connections, and flows. In other words, get off your duff and see the current reality with your own eyes. Reminds me of "management by walking around" and the "as is" part of an IT proposal.

2. Eliminate waste systematically. Over-processing and over-engineering are common sources of waste, but excessive handoffs and poor understanding of a process flow are right up there.

3. Establish high agreement of what and how. The authors don't simply mean standardization. Instead, they talk turkey about turf, ambiguity and ruts.

4. Solve problems systematically. The scientific method isn't just something your kids learn in school. Lean advocates embrace the scientific method, and that makes it easy to avoid confusing activity with productivity. Lean is about experimentation and metrics, not tools – or even principles such as these.

5. Create a learning organization. Lean isn't a destination -- it's a process and a journey, just like lifelong learning. As the authors state in their Introduction, "Like hitchhikers, lean practitioners sometimes don't know where the journey will lead…" and "Remember, hitchhikers don't travel a fixed path. They intentionally wander so they can learn and change along the way."

Lean Tip #2. Apply creativity before capital. One company needed to reduce its order entry time. The easy solution was: a) buy a new order management software system, and b) hire more customer service people. But, using a " Lean" lens and really, really looking at the problem produced a different answer. The fax machine was on the other side of the room and customer service people would only go over to it when they printed something, because the printer was next to it. Sometimes a fax might sit there for four hours. Solution? Move fax machine. Cost? $0. Benefit? 4 hours. Then they looked at credit checks. Eighty percent of the orders went to credit check even though only a small percentage of them needed to be held for some reason. Orders could sit there for four hours. Changing the filter on who gets rerouted to credit check means that the majority of orders pass straight through without any risk to receivables. Solution? Change credit check filter. Cost? $0. Benefit? 4 hours. When the orders went to the floor, they were printed in the order received for picking in the warehouse. But that wasn't efficient for picking, so the pickers rewrote the list in their preferred orders, often making mistakes in translation and costing time. Solution? Print the list differently. Cost? $0. Benefit? One hour and a reduction in shipping errors. Discovering this stuff wasn't as easy as you might think. But the Lean lens provided a way to examine it and determine solutions for problems that were in front of their noses for year -- they just couldn't see them.

Common sense, right? Precisely. But the authors elaborate by showing how and why to embrace the Lean approach, and the book is full of the distilled wisdom of the two men who have helped shape the ever-evolving Lean mindset. (They've also mentored thousands of others at their training operation, Lean Learning Center.) It seems to me they practice what they preach, too. Again from the Introduction: "To make the lessons provided in this book simple for readers to remember, each topic is broken into five parts." One can assume that they're borrowing from the Five S community here (Sort, Straighten, Shine, Standardize and Sustain, as developed by just-in-time expert and international consultant Hiroyuki Hirano). The authors invite us to put on a Lean pair of glasses; note again the focus on observation -- and experimentation!

Not only are the authors purveyors of Lean, they're also great story tellers. In the chapter on pitfalls, they recount how a Tier 1 automotive supplier used billboards that proudly proclaimed tallies such as "14,751 kaizens and counting". Bad idea, say the authors, noting that "event lean" isn't genuine lean. They invoke Aesop's fable of the tortoise and the hare to make another pitfall point: Don't sit in endless meetings and study things to death. They contrast the outcomes of Chrysler's Chrysler Operating System (COS) initiative, which was crippled by leadership turnover and DTE Energy's well-planned initial 24-month rollout of its Lean initiative.

Sourcingmag.com readers might be tempted to jump right to chapter 8, Lean Service, where the authors, among other things, remind us that you should sweat the small stuff. Problem-solving the Lean way means looking through those Lean glasses at functions, relationships and flows. The authors admit that service industries such as publishing, education and the healthcare sector have historically resisted even considering Lean principles, thinking it's something that only applies to manufacturing -- a myth that the authors debunk in their Pitfalls chapter. So even if the book doesn't offer any specific advice about IT -- or about outsourcing, for that matter -- it doesn't matter. Lean is an approach; it's something that gets embedded in your and your organization's DNA.

Does this strike home? Does it set you thinking? If it does, I think you'll enjoy the book. It's a quick read; it's extremely well organized and it even has a chapter on Personal Lean with ideas for implementing Lean in your own life and/or Lean-resistant work environment. The final chapter is another gem with "Conversations from the Road." In it, five leaders respond to the same provocative list of questions.

Who knows? A quick read and you could end up by seeing the world through a pair of Lean glasses.

Useful Links:

Hitchhiker's Guide to Lean: Lessons from the Road
http://www.sourcingmag.com/gmz

Lean Learning Center
http://leanlearningcenter.com/

"Lean in Outsourcing"
http://www.sourcingmag.com/content/c060222a.asp

More about the 5 S's of Six Sigma:
http://www.isixsigma.com/dictionary/5S-486.htm

Two classics on Six Sigma by Michael George:
What Is Lean Six Sigma?
http://www.sourcingmag.com/6bp
Lean Six Sigma for Service
http://www.sourcingmag.com/quG

About the Author: