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In working with troubled businesses, my associates and I are accustomed to seeing owners and managers who don’t get around to recognizing what they’re doing wrong until it’s too late. At the opposite end of the business spectrum are the owners and managers who not only do things well but who strive to create a culture of continuous improvement. Simply put, if you’re doing good, look for ways to do better.

One proven method of achieving continuous improvement is by establishing a lean organization, one that creates more value for your customers by using fewer resources. Most anyone familiar with manufacturing has an understanding of lean principles, but many businesses don’t realize that the lean approach has many applications in the back office – in purchasing, accounting, human resources and so on.

In this newsletter, associate Mill Brown offers some ideas on how a lean approach can reduce paperwork and improve efficiency. We also check in with John Coates, President & CEO of HandyTube, for some insight on how going lean improved office operations at his company.

I suspect that some of our readers have already experienced the benefits of going lean. If you have, we invite you to share your success stories with us, and we’ll include your observations in an upcoming newsletter. Just email me at tjbeane@beaneassociates.com.

We hope you find this discussion helpful, and we encourage you to forward this newsletter to anyone you think might find this information valuable.

As always, your comments are welcome, and we look forward to hearing from you.

Sincerely,
Tom Beane
President CMC CIRA

The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easy to achieve:

Specify value from the standpoint of the end customer by product family.

Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.

Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.

As flow is introduced, let customers pull value from the next upstream activity.

As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Source: Lean Enterprise Institute

When we hear the word "lean" applied in a business setting, we immediately think manufacturing. After all, it was Toyota that first applied the lean approach to its assembly lines, triggering a seismic shift in production processes felt throughout the entire manufacturing world.

It has taken some time, but businesses — not to mention nonprofit organizations and government agencies, including Delaware’s Department of Natural Resources and Environmental Control — have learned that the concepts and values that have made lean the standard for manufacturing efficiency deliver similar returns within an office environment.

The essence of lean thinking is the elimination of waste — creating processes that need less human effort, less space, less capital and less time to make products and services at a lower cost and with fewer defects than have been done previously.  

In a manufacturing environment it is easy to understand — and to monetize — the value of improved efficiencies in production. It might not be as easy to document that value in an office setting, but reducing the expense of processing an invoice or a purchase order from $20 down to $15, for example, can really add up when applied to thousands of transactions over the course of a year.

The same principles that apply to the manufacturing side of your business apply to your office operations. The ultimate goal is to eliminate any work that does not add value. To do so, you must specify the value you’re seeking  (for example, cutting processing time on invoice payments by 25 percent), and then identify the steps in the process, map it out and determine how to make it flow better.

If you’re familiar with lean principles already, you’ll understand the process I’ll describe here. If you’re not, there’s plenty of information readily available. Good places to start are The Lean Institute and the bible of the lean movement, Lean Thinking by James P. Womack and Daniel T. Jones.

The key steps in establishing a lean process are contained in what is known as the "5S" program, which stands for Sort, Straighten, Shine, Standardize and Sustain. Expressing the steps simply, it comes down to this: Sort out the steps in your process. Straighten them out so they move forward logically. Clear out the unnecessary steps so the process shines. Standardize roles so everyone knows what comes next so the steps become second nature. Sustain the process as you move toward continued excellence.

In virtually every office, it is easy to find bottlenecks that have developed over time that can be eliminated by analyzing work flow from a lean perspective. READ MORE

The HandyTube Experience

HandyTube, based in Camden, Del., is a unique manufacturing business, producing seamless stainless steel coil tubing for diverse industries worldwide. Through a unique heating and cooling process, HandyTube is capable of stretching and coiling stainless steel pipe to lengths of 6,000 feet, and with an outside diameter as small as two-hundreths of an inch. Its products are used in the healthcare, aerospace and oil and gas industries.

When HandyTube saw a need to improve production efficiency, it sought assistance from the Delaware Manufacturing Extension Partnership (DEMEP), which provides training in lean manufacturing techniques. More recently, the entire Handy & Harman Co., of which HandyTube is a part, decided it wanted to implement lean processes throughout its entire operation, not just on its production floor, says John Coates, President & CEO.

"Most of the opportunities for savings through lean are on the floor, but when we looked around, we realized there were opportunities everywhere, including in the office," Coates says.

Handy & Harman has tried several different approaches in its lean analysis – including the typical cross-functional kaizen, where employees from several departments come together to analyze issues within one department, to bringing in specialists in a single area from other installations to study issues at a particular site. READ MORE

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