Applying Lean Principles to the Back Office (Manufacturing or Service)
In today’s uncertain financial times it is becoming more and more imperative that businesses look at their activities and focus in on minimising unnecessary costs, reducing waste and improving inefficient procedures.
A large part of any business are the administration costs which represent a significant element of the total business overhead. These office processes are as targetable for process improvement as any traditional manufacturing or production operation.
If fact some sources state that over 60% of the costs of a product or service come from administrative processes. In general, the higher the number of human touches or decision points in a process, the greater the ROI in optimising that process and with an average employee spending 30 to 40 percent of his or her time looking for information they can’t find, these processes are swamped with waste. Most of the users to these processes will have developed workarounds over time, with this comes process slip and inefficiencies.
How do we then start to optimise these processes?
The answer is simply “Apply Lean Principles”.
By defining Value in the eyes of the customer (not the provider) we create a robust specification. We must then build repeatable processes (without waste) to deliver that specification.
My approach has always been Analyse, Design, Implement and Sustain.
Analyse the current situation: process mapping, data gathering, and business assessments.
Design the future state process/structure, design roles and responsibilities, design the implementation plan and communication plan.
Implement: Execute the plan with good leadership commitment and governance (Obeya Room Process, Operations Room, War Room)
Sustain: Conduct follow up reviews, post change assessments to ensure adherence, management reviews of KPI’s (key performance indicators)and implement a framework for continuous improvement.
Tangible Customer Benefits:
- Sales Customer Facing Time Increased by 245%.
- Process Efficiency Increased by 95%.
- 38% of lost Sales back into the business.
Reality is invariably different from perception,
Few things work the way we think they do!