Ashutosh has over 18 yrs of exp. in managing business & IT teams. He holds a Bachelors degree in Electronics Engineering and a Masters degree in Information Systems.
Lean Systems Thinking
Lean systems thinking is a business methodology aimed at understanding how to organize human activities in order to deliver more productivity to the society and value to individuals while eliminating waste. The term, which was coined by James Womack and Daniel Jones, aims at creating a unique lean enterprise that sustains growth by aligning customer satisfaction with employee satisfaction. It suggests that this satisfaction leads to an optimal and profitable production or delivery of goods and services while minimizing over-expenditures to customers and suppliers and saving the environment.
It bases its ideology on the fact that if an enterprise trains employees to identify and quantify time and effort wasted on their job, and maximizes it, the quality outcome is less expensive, and the employee develops competency and teamwork.
Systems Thinking Methodology
Peter Senge, an American scientist, shared his approach towards systems thinking. According to him, the learning organizations are the ones where people nurture their thinking ability to create outstanding results. Such organizations adapt quickly to customer needs and are able to excel in their fields.
According to Senge, systems thinking focuses on how an individual interacts with the system. It does not focus on the individual in an organization, but rather it focuses on the individual's interaction within the organization. Having different points of view from different people about a system allows new ideas to remove waste from the system. He insisted on having a collective intelligence approach to work differently.
Linking Goals and Actions
The first step in the lean systems thinking is driving out waste so that all work adds value and serves the customers' needs. There is a need to evaluate value-added and non-value-added steps in every process as to achieve this purpose.
According to Womack and Jones, these five key principles are used to link lean thinking with its goals and actions:
It means the customer's need for a product or a service. Value can be the price point of a product or a timeline for a delivery.
2. Value stream
After determining the value, one must prepare the value-stream mapping by determining all the actions taken by a product or a service in any process. It's similar to preparing a step-wise flow of a product or a service after removing the waste (unnecessary steps) in the process.
After removing the waste from the value stream, the next step is to smoothen the process flow towards the customer. This will ensure the flow is free from any delays or interruptions. It improves the time to market to the customer.
This involves 'just in time' manufacturing, which means delivering products as needed. Customers can 'pull' the product as needed, so there's no need to build products in advance and create expensive inventory. This saves money to the manufacturer.
Lean isn't a one-time process, but rather it's a continuous process. All the above steps will help in making lean thinking a part of organization's culture. A continuous effort is required from every employee to perfect a system to get the maximum benefit.
One can observe the examples of lean systems thinking in the following industries:
In healthcare, lean thinking is applied in providing value to a patient and by eliminating delays, overcrowding, and the frustration associated with the healthcare delivery system. It creates an avenue where what's supposed to be done is done. Clinicians who apply lean thinking reduce wasted time and spend more time delivering quality patient care. With lean thinking, a patient's journey can be planned to be safer by eliminating all kinds of waste and treating more patients with existing resources.
2. Manufacturing Industries
Many well-known manufacturing companies have successfully achieved reducing the cost and resource utilization through adopting lean systems thinking. Toyota, for example, tested the effects of reducing time wasted on unproductive activities by its office workers. It was observed that the annual income increased by a significant amount. The resulting index showed that the company was able to achieve what it usually achieves in two weeks in a day. This is more powerful than any traditional quality improvement effort.
Large public companies undergo routine restructuring on a regular basis with the primary goal of achieving better economic output and demonstrating superiority in the industry. However, this restructuring doesn't stabilize the working environment as the employees try to meet up with new goals. Different sectors of the company often pursue the achievement of goals individually, creating a gap between the sectors. With lean system thinking, an effective bridge is built between the various sectors to create an atmosphere of employee alignment and commitment to challenging business conditions; the result is increased output.
Let's take a few moments to recap what we've learned about lean systems thinking in this lesson. Lean systems thinking is a methodology that shows how human activities can improve productivity while eliminating waste. It focuses on creating lean enterprises that sustain growth by aligning customer satisfaction with employee satisfaction. Peter Senge, an American scientist, says that systems thinking should be focused on individual's interaction within the organization, rather than concentrating on just an individual. Lean systems thinking can help in achieving goals and actions by following key principles, which include the following:
- Value, which focuses on the customer's need for a product or a service.
- Value stream, which involves preparing the value-stream mapping by determining all the actions taken by a product or a service in any process.
- Flow, which involves smoothing the process flow towards the customer.
- Pull, or 'just in time' manufacturing, which involves delivering products as needed.
- Perfection, which means that this is a continuous process, undertaken by all employees.
Lean systems thinking applies in many different areas of business, including manufacturing, healthcare, and business management, to name a few.
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