Enterprise Ireland has introduced an Operational Excellence Offer with the aim of supporting companies of all sizes to address their competitive challenges and growth opportunities through a transformation programme. Transformation projects supported under the offer will include investment in business innovation, capital equipment, and capability building through training in Lean.
Projects should involve a significant change in how the company does business and should not be focused on routine operational changes. Examples include a manufacturing company investing in new equipment and integrated software systems to implement a new production method using Lean principles, or a services company implementing a new production method involving new standardised process design, automation of parts of the process and training of staff in Lean principles.
Supply chain management is also covered, and support is available to companies implementing new methods of doing business with suppliers and partners, including investment in new equipment, software development and training of management and staff.
Lean is at the heart of the new offer, according to Enterprise Ireland operational excellence manager Ruairí Ó hAilín. But it is critically important for organisations to understand what Lean is, and what it isn’t.
“If you want to annoy a Lean expert talk about ‘lean and mean,’ ” he says. “It’s not about minimising or cutting costs. It’s about aligning to customer value. When you do that, costs fall away. If you start with a mean mindset, it doesn’t work. It’s really about having staff fully engaged. Lean is often equated with the elimination of waste, but this view of Lean misses the mark when it comes to realising its true value.”
He quotes from Denise Grey, chief marketing officer at LeanKit, who has given a useful definition of Lean. “Lean is about aligning an organisation’s skills, talents, resources, processes and strategy with the needs of its customers. Finding this alignment allows organisations to be lightweight and nimble – which allows them to quickly respond to changes in the market and ensure sustainability.”
But this is just one of many views on what Lean is. “What is Lean?” Ó hAilín asks. “It is all of those things and none. Fundamentally it’s about aligning people and customer value, and operation excellence is about creating a learning organisation. It’s about figuring out your purpose as a team or organisation and your value to customers, both internal and external, and writing it down.”
Constant refinement
Writing down standard work processes enables them to be refined continuously. “You need to constantly ask why until the process eventually aligns with the purpose. As new issues or ideas arise, the standard work process should be updated. And any process that doesn’t serve the purpose needs to be questioned. You also have to look at the process flow, and remove interruptions and delays by introducing structured problem solving.”
Lean is as much about mindset as it is about process. For example, instead of fretting about it, people should get excited when they hear about a problem. “The best learning comes from when people are giving out about something,” says Ó hAilín. “You need to get behind the reasons why they are complaining. Maybe it just sounds like moaning, but taking the time to really understand what the problem is brings new insights into how to improve either leadership or processes – or alignment to purpose. It doesn’t matter if it’s staff, customers or suppliers who are complaining, we need to take time to understand the issue and get excited when there is one.”
It’s also about making continuous improvement part of everyone’s job. “It’s not something someone else does for you,” he says. “People can have very different views of what they do in the team. They should be constantly looking at what they are doing and asking if it’s overlapping with other areas or running counter to other teams. They should be asking how they can line up to deliver value to customers.”
Visible to all
Those work processes should be visible to everyone. “They shouldn’t be kept hidden in a folder somewhere,” says Ó hAilín. “When you walk into a Lean organisation, you feel the energy from the people there. The walls are being used for communication. In the virtual world, the walls are being replaced with web pages or SharePoint. People are continually asking what they learned from the last week. It’s all about the learning organisation. That’s excellence.”
The results of previous Enterprise Ireland Lean programmes have been very impressive. The average estimated annual cost savings identified by clients in the past 12 months are €43,000 for the LeanStart programme and €158,000 for LeanPlus. LeanStart companies also reported capacity increases of 15 per cent, while the figure for LeanPlus companies was 18 per cent.
Companies can start to implement Lean in sections or individual teams if it is not possible to embark on a business-wide project. “It’s much better to do it across the entire organisation,” says Ó hAilín. “But it’s still worthwhile doing it with a single team, as others will start noticing the results. We have a database of more than 340 Lean business studies that people can learn from as they begin their journeys towards operation excellence and becoming learning organisations.”