a guest post by Megan James;
Lean and the philosophy of continuous improvement can and should be applied to all parts of the business, not just operations or manufacturing. The phrase “Operational Excellence” through its wording assumes that the continuous improvement approach is just “an operations thing” or “only applicable to manufacturing” which is just not true. By embracing the concept of Enterprise Excellence, the approach is can become equally applicable to service and transactional processes.
Enterprise Excellence assumes that every organisation can and should be excellent and be able to deliver sustainable business results. It provides a more holistic business approach that advocates that every single part of the organisation plays a critical part in driving that excellence.
By embracing this thinking, an organisation extends performance efficiencies and effectiveness to their whole value stream, increasing their ability to deliver ideal customer results as well as grow the business in a sustainable way. Understanding how Lean thinking can be applied to all core and supporting processes is key to delivering competitive advantage, for instance, sales, HR & L&D, finance, procurement etc. Equally, the approach and philosophy is something that is generating increasingly impressive results in business service companies such as financial services, retail, and online services.
This thinking is also reflected in the world renowned Shingo Model for Enterprise Excellence, which expects organsiations to have applied the thinking and model to all parts of the organisation and is increasingly seeing more service sector companies recognized with the prize: https://shingo.org/shingo-model/
So why aren’t more organisations doing this?
The cultural stigma behind Lean as just Lean Manufacturing remains strong and there is still the perception that Lean cannot be applied within service-based processes. This however is a cultural perception and should be challenged.
If you go back to the core principles of Lean, the primary focus is driving value to the customer (whether internal or external) and then creating flow and pull to drive optimal value in the most efficient way.
Although it can be more difficult see, touch and feel the processes and key wastes in a service environment, they still exist and can have just as much impact on the performance of the organisation and value creation for the customer. Arguably even more so in a service businesses that thrive on excellence in the customer experience. The principles remain the same – it is merely the application of the approach that needs to be adjusted to suit the service environment.
But does it work in practice?
There are many case studies of service organisations that have delivered significant step changes in performance through embracing an organizational wide approach to Enterprise Excellence.
One of the best-case studies around this topic is the Commonwealth Bank which became the first financial services organisation to win a Shingo Prize. They succeeded in not only driving Lean processes but by creating a Lean system and culture. Further insights can be found in the award-winning publication 4+1: Embedding a Culture of Excellence in Financial Services which explains the simple and structured approach they took to changing behaviors.
Looking to get started?
If you are looking to get started on your Enterprise Excellence journey, then make sure you join the upcoming virtual event – Driving Change in Financial & Service businesses, 4th December 2020. Joining is free and we welcome LBI members to join the session.
For those of you exploring Lean funding via the IDA or EI then make sure you join the panel session on funding options for the Irish market to help answer your questions.