Lean management is an approach to running an organization based on the concept of continuous improvement, systematically seeking to achieve small, incremental changes in processes in order to improve efficiency and add value.
Often simply known as ‘lean’, this transformative management philosophy originated as ‘lean manufacturing’ – having derived mostly from the Toyota Production System, developed decades earlier, but identified as ‘lean’ in the 1990s.
Its heritage has to some extent fuelled the misconception that lean is all about manufacturing and production processes and, added to other negative preconceptions, has limited its adoption in other sectors, away from the shop-floor or the F1 pit stop.
In a recent article Barry Cross, of Smith School of Business Queens University, points out that one of the more significant opportunities today is in government, where – taking the Canadian experience as an example – untapped opportunities remain at the provincial and, in particular, municipal levels.
A few municipalities in Canada are taking a new approach and shifting their financial and operational paradigms, in this extract from his article Cross describes the promising results in the city of Oshawa:
The initiatives naturally met with some initial skepticism and resistance, especially around the application of lean principles to city operations. Sharma gathered support from forward-minded mayor John Henry, councilor Nancy Diamond (former mayor and chair of the finance committee of Oshawa and a Queen’s alum), among others, and launched several introductory projects. Mayor Henry stated that effective change management that involves front-line employees is the only way to make lasting change. Councilor Diamond pointed out that the city could not keep doing things the same way and expect different results. Oshawa was working to get out in front of its challenges.
Over several months, Sharma, Coté, and the team applied kaizen (continuous improvement), work cell optimization, and other lean tools. The projects targeted Parks and Road Operations, Waste and Facilities, and other areas of Community Services with combined staffing of just under 300 people. Results were not immediate but within just a few months, significant improvements were made.
- Payroll processes were streamlined, cutting associated tasks in half.
- Data entry in Waste and Facility Operations was eliminated.
- Parks and Road Operations cut timesheet entry by 45 percent.
Sharma admits that these gains are small in the overall scheme of things in a city the size of Oshawa, but he realizes the city has to start somewhere. The combination of hard savings and cost avoidance made a significant impact. Their lean journey will be a long one, as is the case with many organizations. As the team gathers experience and enthusiasm, more projects are now underway, including a review of Fleet Operations and further work in Parks and Road Operations.
Credibility for his initiative is increasing among employees, staff, and council members. Through this period, no jobs have been eliminated but responsibilities have shifted. As waste and complexity are reduced, resources can be applied to creating value and a focus on more important work around the city. Staff morale and pride have increased, along with a sense of ownership among employees. Operationally, the city has boosted its ability to get things done, which ultimately is what Oshawans want and are paying taxes for.
Lean has long been applied within the realm of manufacturing and plant operations and more recently within services. Municipalities and other levels of government are now seeing the benefit of a lean philosophy, increasing their agility and ability to create more value. When you think about it, the answer is clear: yes, you too need lean.
Read the original article in full
Barry Cross is an assistant professor and Distinguished Faculty Fellow in Operations Strategy, and author of ‘Lean Innovation: Understanding What’s Next in Today’s Economy’.