Are you ready to Lean?
Regardless of industry, today’s consumer-centric world requires organizations to challenge the status quo and move into a new way of looking at how to better deliver products and services.
A business can only go so far in its race to bottom-line pricing; the key is to find differentiators that deliver increased customer value. There’s no better way to achieve this than through reengineering and optimizing your organization’s business practices.
Continuous process improvement, sometimes referred to as Lean Six Sigma and Design for Six Sigma, offers an ongoing improvement program that can define how an organization embraces change. The principles of Lean were first applied to automotive manufacturing in the U.S., but refined by the Japanese after World War II. Toyota Motor Company recognized that workers had much more to offer than just muscle, and initially experimented with Quality Circles. Eventually, this was distilled into principles that improved process and quality control to increase productivity.
Today, continuous improvement principles are at the heart of organizations across the economic strata. In the financial services industry, we successfully introduced Kaizen principles, which eliminate waste in the workplace, to a national bank struggling with the timely submittal of Currency Transaction Reports (CTR). These reports are required for any transaction over $10,000 — and there are hefty fines leveraged by U.S. regulators for not submitting them quickly. The bank’s overly manual CTR system created paper-intensive, inefficient and cumbersome processes that left the organization at significant risk.
The story has a happy ending: by reengineering its processes, the bank experienced a 40% improvement in CTR filing timelines and eliminated the need for additional personnel. This was achieved through team training in Lean concepts and tools, identifying critical gaps in transaction aggregations and eliminating obsolete regulatory requirements.
Healthcare is another industry that has seen tremendous gains in productivity through the institution of continuous improvement programs and process assessments. For example, a Level One trauma hospital had 18 operating rooms, but had inefficient scheduling that led to chaos, low morale and an overall cost-per-case that exceeded the national average. By helping the hospital create new OR practices such as scheduling by case type, the hospital saved $1.25 million in the first year. The average cost per case fell 30% below the national average.
The fact is, any organization could and should consider adopting Lean principles sooner rather than later. Here’s what you need to ask yourself:
- Do you think your organization needs to improve?
- If so, do you think your organization is ready to make changes?
- Is your organization prepared to devote the time/investment required to create changes by eradicating waste and improving processes?
- Finally, do you think Lean methodologies might work for you?
In addition to Toyota, some of the top countries in the world use Lean principles, including John Deere, Intel, Nike, Amazon and Bank of America. Perhaps your organization should join them.