Lean Principles and techniques have been applied to manufacturing settings for over 20 years with proven results. It is only in the past 5 years that businesses have begun looking at the challenges of improving their indirect or office operations. In many industries the Sales and General Administrative (SGA) expenses do not account for a large component of business costs. However, the need to reduce costs in all areas, and the even more important need to speed the flow of paperwork through the office, has caused businesses to look more closely at how paperwork flows through the organization. A cost reduction is still a reduction in expenses and that means more profits.
Look at your sales order process; your purchase order process; your design/engineering process/ your payroll processing; and your end of period account “closing” process. All of these processes are repetitive and required processes for the health of the company. What can be done to reduce the costs of performing these processes?
The principles of Lean cause the user to focus on the flow of the product (paperwork) through the various stages (desks) until it is completed. By applying these principles to the office environment, the same benefits of increased through put, reduced errors, reduced rework, better visibility of the work flow and reduced personnel costs can be obtained in the SGA areas of a company.
Lean methodology is the same in an office environment as in the manufacturing area. First, identify the process flow and the paperwork that moves through the office (called in Lean terms the “value stream”). Map the flow of the paperwork through the process steps paying particular attention to the amount of time a piece of paper is being “worked on” and the time this paperwork isn’t being worked on and just sits somewhere. From this map (called in Lean terms the “value stream map”), the team can identify areas and tasks that can be combined, modified or even eliminated to reduce the amount of time the paperwork is not being processed. The Kaizen teams will implement the changes, usually within less than a months time. Then the mapping process can be conducted again to see if additional improvements can be identified to further speed the process.
The same techniques applied in the manufacturing setting can be applied in the office: 5S (“clean desk”), quick set-up/change over; small batch sizes; flexible work teams; Point of use storage; standardized work; visual workplace; Pull/Kanban; and office layout. The benefits that can be obtained from the application of lean principles can reduce the SGA costs by as much as 30%. These cost savings typically come with no capital expenditures. Ask yourself this question: What other things could my SGA staff do for the company if they had 30% more time?
Lean Principles can be successfully applied in the office environment. The cost savings are real and mean improved profits.
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