Get Office LEAN
By Sarah Banks & Karen Juroff
Planning & Operations
Universal Advisor , 2004 Issue No. 3


Lean principles are not a new concept. For more than 25 years, Lean has been successfully implemented in the manufacturing industry to eliminate waste and increase revenue. It’s only recently, however, that organizations are using “Lean Office” as a business operating philosophy and key productivity factor to streamline and eliminate waste from administrative processes, improve quality, and achieve bottom-line savings.

According to Value Stream Management for the Lean Office, by Don Tapping and Tom Shuker, 60 percent to 80 percent of all costs related to meeting customer demand are administrative or non-production-related functions. Therefore, to be “Lean,” the concepts must be understood, implemented, and sustained throughout the entire organization.

Benefits of Lean Office

In most organizations, opportunities to apply lean concepts are abundant and can impact administrative processes at all levels. At the enterprise level, lean can help accelerate those processes that touch external customers and suppliers (e.g., order entry, customer service, product development, distribution, etc.). At the organizational level, lean streamlines key support processes (such as IT, human resources, and finance) and improves communication and cross functional cooperation. At the department level, lean reduces activities that add time but little value, improves workflow, and measures progress. And at the individual level, lean can reduce paperwork and errors and clarify roles, responsibilities, and objectives. Since process improvement is not a new concept, why haven’t more organizations become ”Office Lean”? Common reasons include:

1. Lack of clearly defined administrative “value streams”
2. Limited data collection
3. Lack of understanding between “waste” and non-value-added activities in office environments

Lack of Clearly Defined Administrative “Value Streams”

A Lean Office initiative commonly begins with mapping and analyzing each “value stream” — the steps that comprise a given process — from suppliers to customers. This can sometimes be a struggle in an office environment where there are many small, intersecting value streams or when the “product” of the value stream is not well defined. Nevertheless, it’s a critical first step to sort out the following:

• Who benefits from the work being done, and are their requirements being met?
• Are there steps in the process that don’t add value to the receiving “customer”?
• Are work tasks evenly distributed in the department?
• Are work areas disorganized?
• Is the process operating on a Just-in-Time basis? (In other words, is there a continuous flow of work, or are there large ebbs and flows in work volume? For example, are employees able to process work as it comes in, or is there a stack waiting for catch up?)
• Is there a lot of variation in how workers perform value-added tasks?
• Does delay exist in the current process? Does material/information sit for a long time, or is work delivered before it’s needed?

Limited Data Collection

Most organizations collect limited, if any, data on administrative processes. Lean places great emphasis on data-driven decision making. For support and administrative operations, determining what data to include depends on what questions you’re trying to answer about your value stream and how you define the “product” produced by these operations.

For example, if your objective is to reduce days in receivable, it would be helpful to define “invoices” as the product and identify the total number of invoices issued, cycle time and queue time for processing and collection, and total cycle time. From this information, you can determine where bottlenecks most likely occur and eliminate areas of waste in your “future state” process.

Lack of Understanding Between “Waste” and Non-Value-Added Activities

Lean is about eliminating waste — errors and inefficiencies that drive costs, quality and customer satisfaction issues, and delays. All activities within a value stream must fall into one of three categories:

1. Value-added — adding value or worth to the product or service
2. Non-value-added — work that may not directly add worth to a product or service but is currently required for business or regulatory reasons
3. Waste — non-value-creating work that can be eliminated immediately

This is not as simple as it seems; at first glance, all support and administrative activities may appear to be non value- added. Thus, the challenge becomes determining the difference between the non-value-added work and waste.

Get Lean

Lean is a proven, systematic approach that eliminates/minimizes waste resulting in the production of goods and services at the lowest possible cost. It’s not merely a manufacturing program confined to the shop floor. As all organizations face higher customer expectations, cost-cutting pressures, and reduced lead times, Lean Office can provide an improvement solution for those often-overlooked administrative processes benefiting every system, every process, every employee, and every customer within the organization.