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Lean thinking in professional and service industries

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LEAN Thinking is a manufacturing based methodology for reducing waste and cost.

Lean Thinking can be applied to any enterprise - for profit of not-for-profit, according to InteLog .

Businesses that succeed on an ongoing basis are characterised by consistent features and attributes including:

* Leadership

* Clear vision, mission and business goals and targets

* Customer value focus that is understood by all

* Involved and committed staff

* Process based

* Passion to remove waste and improve business performance

* External stakeholder integration.

These features do not mention anything about a product or services. InteLog says these features are consistent across all forms of successful business and not-for-profit entities.

The five principles of Lean Thinking:

* Specify what does and does not create value from the customer's viewpoint

* Identify the whole value stream

* Make information and products flow

* Only make or supply what is pulled by the customer

* In pursuit of perfection.

Lean Thinking is by definition not product or industry specific in its principles and in its application, even though its early roots were in the auto industry.

Research in the last twenty years and its subsequent application has demonstrated this reality and most business sectors are successfully applying lean principles to improve business performance, according to InteLog.

The feature of highly successful companies and entities is that they embody most, if not all, of the lean principles, even if the word lean is not used.

So how does Lean Thinking apply to service and professional businesses and how can it produce the startling improvements demonstrated in the manufacturing, food, medical and retail industries?

InteLog says to look at any manufacturer and what they basically do. They source various components and materials and form and assemble them into the product.

That product may be a finished product or it may go on to be further assembled to make a finished product.

The similar picture applies to the food industry - product is grown and processed or packaged for distribution to the end customer.

The process in both instances is a combination of people, process, and the flow of information and material, and features demand, value and non-value adding activity.

A service and professional business has the same features and characteristics. The end product may be drawings, plans, advice, management support, finance and insurance.

The process of combining people (knowledge, skill, expertise), infrastructure and processes in an effective manner that produces a value outcome for the customer is just the same as for any business.

In each instance it is the effectiveness of management in bringing together their resources to convert the inputs in their value creation process to outputs that customers value in the most efficient and timely manner that makes companies winners, says InteLog.

Lean Thinking provides management with the framework and tools to achieve value fulfillment excellence.

The five steps to going lean and applying lean to any business are:

* Understand customers and what they value

* Using this to set direction, targets and checking results

* Define the internal value stream

* An internal framework for delivering value

* Eliminate waste, make information and products flow, pulled by customer needs

* Appropriate methods to make necessary change

* Extend the definition of value outside the company

* Externalise the value focus to the whole value stream

* Continually aim for perfection

* Strive for perfection in the product and service in all processes and systems.

According to InteLog, it is fundamental to a lean value stream that waste is removed from both inside and between companies.

The improvement in productivity and in a business’ capability to deliver value comes from the systematic attack on waste associated with the systematic assault on the factors underlying poor quality and management problems.

It is the balance of adding value and removing non-value adding waste that provides a business with the capability to grow and increase its profit potential, says InteLog.

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