If it seems as if the front office just isn't keeping up with the rest of the world when it comes to Lean, you're probably right.
Despite the latest computer upgrades and office technology, the traditional administrative culture is in the dark ages when it comes to efficiency. Many offices operate from day to day buried under a tangle of waste - mounting paper, endless meetings, unnecessary policies, confusing and conflicting goals, reports nobody reads, errors and rework.
The problem is that most companies do not focus on improving office and administrative functions with the same vigor as they do on materials flow processes, according to Cynthia Christie, project director/field engineer in MAMTC's Colorado office.
"There may be too many handoffs, too much walking around and a lack of clarity. They feel the 'pain', but they accept it as a way of life," Christie said.
"What's great is that the same Lean tools used on the shop floor can be applied to the front office. You can apply the principles of waste elimination, problem-solving - all the Lean principles - to your office functions, " Christie said.
And that's what Lean Front Office is all about - the term used to describe the elimination of costly waste in the office and administrative environment.
Finding the hidden waste in business processes
Lean Front Office uses Lean techniques - like value stream mapping, 5S systems and error-proofing - to attack the underlying causes of waste in office and support functions and eliminate them.
"Unfortunately, Lean thinking has been applied almost exclusively to the shop floor. It is very tangible there and people get excited about the changes they can see. However, usually the majority of waste is not there - it's in the front office. You need to work on both," Christie said.
"It's common to find a Lean shop floor and a front office struggling with waste, both in the same organization," Mark Minter, regional director of MAMTC's Overland Park office, said.
He noted an example involving an engineered, make-to-order firm. "They advertised they could deliver in five weeks. Producing the product took only one week. The other four weeks were tied up in planning, scheduling - all the front office activities," he said.
Interest in Lean Front Office is increasing as manufacturers look at the enterprise as a whole and how waste can be eliminated from all functions.
"A client who manufactured office chairs and equipment brought us in to implement Lean manufacturing on the shop floor. But the project grew to the front office. The goal was to reduce overall cycle time from when the order was received to when product was shipped. This naturally included order entry and other administrative areas, " Minter said.
The problem is that waste in the front office is more difficult to see than on the shop floor. But it is in every process. In Office Kaizen: Transforming Office Operations into a Strategic Competitive Advantage, author William Lareau identifies four categories of surface wastes that contain 26 specific types of waste. These range from hand-off and inaccuracy waste all the way to leadership waste - the lack of focus, structure and discipline among executives.
While waste on the shop floor may be more obvious, waste in office and administrative processes can be more costly. When a large invoice is not collected, a sales proposal is delivered late, a quote contains errors, these wastes translate into lost business and chip away at the bottom line. Millions of dollars can be at stake.
In Christie's experience, front office people are unaccustomed to being held to the same process standards as shop floor employees. "The first time you write a purchase order, or create an engineering drawing, or do a trial balance, what percentage of time is it correct? There are almost always re-dos. On the shop floor, you can't do it over and over and expect to keep your job very long. They are accustomed to a different quality standard," she said.
Creating flawless processes
Getting front office employees to think like shop floor employees is not always easy. "What people do in the front office is a series of processes just like the shop floor. As a salesperson, you must understand that a perfectly defined sales order with one hundred percent complete and accurate information is your product. As a design engineer, a complete, accurate and efficient engineering package - released on time - is your product. As a leader, a clear concise strategy perfectly communicated and deployed is your product.
"Just like anything else in a Lean Enterprise, creating a Lean Front Office is about identifying what is really of value in non-shop floor processes and building systems around them that behave flawlessly," Christie said.
As people are trained to identify how Lean wastes and Lean tools can apply to the front office, they begin to think in new ways and see the possibilities. "What would a perfect world look like? What if you didn't have to expedite anything? How can we change this to make it better," Christie said.
Value stream mapping is an essential tool used to identify non-value added activities in office functions, Minter said. Through spaghetti diagrams, data boxes, decision trees and other techniques, teams review the current state value stream, identify the problem areas and create a future state.
Protecting your cash flow
"The real value of using value stream mapping in the front office is the ability to look at the whole process - from quote to order to invoice. This is important because it's your cash flow - often a small manufacturer's Achilles heel.
"Although some 'get it' immediately, don't be discouraged if Lean Front Office doesn't click with employees right away," continued Christie. "The idea can seem foreign at first. You start with an understanding of the materials flow. It is a real eye-opener to go through the materials value stream mapping process. This gives people a better perspective on the shop floor processes they support.
Creating awareness of hidden waste and giving managers and workers the tools to fix it is what it's all about. "Value stream mapping will identify where and how big the problems are. You can analyze what you have without an exhaustive process. Then as you dive in deeper and think about the different steps as a team and ask the 'why' for each step, you will create awareness. Give them the problem solving tools and the time to make improvements, and they're on their way.
"Once the right people are on board, it can actually be easier to change the front office than the shop floor, but don't count on it," said Christie. "At one company, we trained an internal team to facilitate the value stream mapping process themselves. However, they called us back for assistance when they went to work on the front office. The walls between functions were so thick and there had been so much finger-pointing between departments over problems, that there was no one internally who could be effective at facilitating an order-to-invoice value stream map," recalled Christie.
"An information flow can cut across more fiefdoms than a materials flow," said Christie. "Patience, persistence and clear unyielding leadership will get you through process. The payoff is well-worth the effort."
Why implement Lean Front Office?
- Avoid re-dos on the factory floor
- Eliminate excessive handoffs, returns, and duplicate work
- Reduce contract and document processing time
- Improve order to cash processing flow and accuracy
- Improve customer lead-time
- Integrate technology more effectively
- Improve communication across departments and minimize conflicts
- Free up people to do strategic and proactive work
- Make individual and departmental responsibilities crystal clear
- Create a more focused and profitable organization
|
