Which Kaizen is used in production departments

Seven Reasons for Lean Administration

In the following, 7 reasons are explained why it is worthwhile to make the task execution of knowledge and service workers more efficient and to deal with the approaches, methods and tools of lean administration.

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© Copyright / image source: LMX Business Consulting GmbH


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the initial situation

"Making knowledge work productive is the great management task of this century," wrote Peter Drucker in the last century. Various studies and analyzes of the situation in offices show that this task has not yet been completed. These regularly reveal an optimization potential of 20 to 30%.

These opportunities for improvement are worthwhile, although more and more companies are realizing that knowledge work is the decisive competitive factor in the global economy. And this is especially true of the western world. Innovation and a wealth of ideas are the engine of the economy.

1st reason: The megatrend towards the knowledge society

We know that we have left agricultural society behind us. By outsourcing production, be it to Asia or Eastern Europe, the share of the manufacturing sector in our economic output is also becoming increasingly insignificant. Even if one or the other production task is currently being brought back, the trend towards a knowledge and service society in Germany is no longer reversible.
So just about everyone has to deal with well-organized work outside of the production halls.

2nd reason: Changed market situation

In the not-so-old days, the price was calculated by adding a profit surcharge to the cost of the product or service, and that was the price. But that is a thing of the past. This type of calculation only worked as long as demand outweighed supply, in the so-called seller's market.
With very few exceptions, we have to proceed differently today. The price is determined by the market. The internet, in turn, has made it more transparent than ever before. But transparency is not the only problem; On top of that, tough competition now meets saturated markets. Actually, consumers have “everything”. And that's why customers are much more picky than they used to be. And the entrepreneurs have to accept the price - often even falling prices -, deduct their costs and then see what remains as profit.
The lower our costs are, the higher the profit will be.

3rd reason: wasted working time

Different types of waste manifest themselves in wasted working time, such as searching for documents, duplication of work, poorly coordinated interfaces, unproductive meetings, etc. And, as is well known, time is money.
So we are wasting money even though it is necessary to cut costs in order to compete.
Learning to see waste and eliminating it helps save costs.

4th reason: Overworked employees

As mentioned at the beginning, up to a third of working time is wasted, with the result that a high percentage of employees can only manage their workload by working overtime or working on the weekend. It is no coincidence that there are more and more mental illnesses in our society, including burnout.
But work should be organized so efficiently that employees can enjoy their free time with a clear conscience.

5th reason: Demographic change

The now well-known demographic change is another reason not to waste time or human resources. There is a shortage of workers, especially skilled workers. All the more, care must be taken with their use. Avoiding wasted time alone will no longer be sufficient in the future; instead, it is also important to prevent excessive fluctuation.
On the one hand, the knowledge must remain in the company and, on the other hand, training times must be reduced in order to be economical in turn.
“Many employees in Germany consider their bosses to be unsuitable in terms of their subject matter and personality. If the employer maintains a coaching management style, it looks different. "

6. Reason: Demanding customers

“This is Rita,” an IBM ad told us a few years ago. “She grows roses, drinks green tea, drives a convertible, visits museums, owns a holiday home, invests in funds, spoils her nieces, separates waste, hunts for discounts. Rita is a good customer. And a tough nut to crack.
It teaches fearful companies to be afraid. Because she doesn't buy from companies that do

  • are too slow
  • do not know their buying habits,
  • dawdle at their expense,
  • accept no suggestion,
  • are not prepared for their wishes.

Like all customers today, Rita is: demanding, demanding, aware of her buying power. Because services are no longer sold, but bought. No longer your own product, the customer plays the main role. He sets the requirements and the companies carry them out - quickly! Otherwise he or our Rita will go away, because she has the choice and the power and thus the final say.
Companies have to take customers and their wishes seriously in order to get customers excited about our services.

7th reason: The flow of information dominates the flow of materials

The majority of customer complaints are usually based on failures in the non-productive areas:

  • the wrong product shipped
  • Office not available
  • miscalculated
  • Request answered too late
  • etc.

The flow of information (from the administrative areas) dominates the flow of materials for the production departments.
If the former is not error-free, the material flow and thus the production will not work either.
Error-free work ensures perfect results.

Result: we have to do something! Lean Administration provides the answer

The seven reasons show that something needs to be done, including in the office and service departments in our company. Lean administration is the right answer to these challenges. Lean Administration takes care of optimizing processes according to the motto: "Don't work harder, work smarter". It is important that the work flow through the company quickly and without disruption, not to let the individual work faster.

Cost reduction is achieved by recognizing waste as such and eliminating it. This also leads to shorter lead times, more reliability and thus more adherence to deadlines for customers. If an error is discovered, it will be eliminated immediately. Due to the error culture practiced in a Lean company, people no longer spend hours looking for the culprit, but instead perceive the error as an opportunity to further improve processes. All optimization steps are sustainably secured by suitable methods.

The fast processing and lead times with low costs and error-free results mean that customers notice the increase in quality. Enthusiastic customers are loyal and generate additional sales for the company.

The employees in a lean company are treated with respect, their know-how is incorporated and their potential is used. Teamwork is important. By eliminating activities that do not add value, space is created for creative ideas in order to identify important trends and meet customer requirements. Experience shows that these factors lead to an increase in employee motivation and a decrease in employee turnover for satisfied employees.

Lean Administration has a large toolkit with tools both for self-management of the individual and for optimal teamwork, but also methods to optimize the flow of work through the entire company. Customers and their requirements are the starting point for all improvement activities. The management provides the vision, the strategy and the goals, broken down into the individual units. The direct manager gives fewer orders or instructions, but feels like a supporter of their employees.

Lean administration lived as a corporate culture ensures that the company, as a learning organization, gains a lead in the market that the competition cannot catch up with.

© Copyright / Image source: Training at the IWEX (Institute for Value Creation Excellence) at the Ruhr University Bochum by LMX Business Consulting GmbH