CUSTOMER FOCUS

A company that is properly using lean processes is a company focused on their customers. They will be creating stronger customer loyalty. I learned many lean concepts when our company started to apply lean manufacturing processes. I saw the benefits and wanted to expand the lean concepts to the company’s administrative departments. Since I supervise a team of five members, I had a place to start using the lean concepts.

Our training began with three lean concepts. They were identifying our customers, eliminating waste and recognizing value added processes. We began the training by listing who our customers were. This is always an interesting learning experience. Their first answer was management. We continued the quest. Their answers now included management and anyone who relied upon the Company’s financial data. It also included anyone that provided us with the raw data that we processed. We drilled down into whom provided us with raw data. Finally, they realized that we had customers outside the company that affected our jobs. They always thought that only inside customers affected their jobs.

It took a little time to get to the point that our Department affects customers outside of the company and that outside customers affect our Department. Once the team better understood the lean concept of identifying customers, they team realized how the outside customers influence their jobs. They eventually recognized that our outside customers actually provide them a job and they ultimately provide them with a paycheck.

We indentified our inside customers as management and department managers and supervisors. Our inside customers also included everyone that provides us with the raw data we use. As we began to talk about our inside customers, they realized that all our customers have expectations and that we have to meet those expectations.

I explained a case where a department's customer rating went from poor to excellent after the department's team members focused on meeting their customer’s needs. After truly focusing on their customers’ needs, the team began to change. Customers that had previously been disruptive or antagonist to the department began to praise the department. Many customers were able to get immediate responses to their questions or their problems. They related how positive their experience had been. Those positive customer comments elevated the team’s opinions about their jobs. Adopting the lean concept of focusing on customers even change the attitudes of the team members. Their jobs became more enjoyable and satisfying.

The lean concept about customers is not a consultant created fantasy to increase their fees. A company’s primary focus must be on their customers. For some departments outside customers are everything and for others it would be outside and inside customers. To edit a saying, happy customers make for a happy company and happy company employees.

To emphasize this point, the companies that weather an economic crisis the best are those whose prime focus is their customers. These same companies seem to be able to maintain their employees with jobs. It seems that their customers are willing to pay to keep the employees employed. Those companies who have lost their focus on their customers or never had it have not survived the economic crises or are barely getting by. They are the companies whose employees are swelling the unemployed ranks.

KEEP YOUR FOCUS ON THE CUSTOMER

THE RIGHT WAY TO PRESENT LEAN ACCOUNTING

Let me set the stage. While attending a Lean seminar, management learned about Lean Office. They were excited and wanted to implement it in their Accounting Department as soon as they could. The company had already implemented Lean Production. The company had experienced great success in production and wants to expand this success to the Accounting Department. Bill, Division Manager, has called a meeting to introduce Lean Accounting to the Accounting Department staff and their supervisor.

The Accounting Department is composed of a staff of five and a supervisor. On their way to the meeting, they have been joking about having another flavor of the month meeting. They all wondered what flavor it would be this time. They entered into the conference room with their note pads ready to jot down the important points of the meeting.

Bill welcomed everyone to the meeting. He began by talking about his trip to the Lean seminar and explained how excited he was about Lean Accounting. He explained that the purpose of Lean Accounting is to reduce the number of steps used when invoicing customers, paying vendors, processing payroll, etc. He said that with all these reduced steps, there will be less work to do. He concluded by announcing that Lean Accounting training would begin in a week. The meet took about 15 minutes.

The Accounting staff was rather subdued going back to their desks. What they heard from Bill’s description of Lean Accounting was two topics; there would be less work to do leading to leaning the Accounting staff. As Mary sat down, she began creating a list of names of people she knows that may be able to help her find a new job. Fred made a mental note to start taking a half hour lunch to show that he works hard. Mable is getting an upset stomach and may have to leave shortly for the bathroom. The Accounting staff was very impressed by Bill’s presentation.

Does this sound familiar? To often Lean Accounting is introduced in this way and with disastrous results. The office staff was developing employment contingency plans before Lean training is even started. A fifteen minute meeting is not sufficient time for a subject as important and powerful as Lean

Lean is all about how willing we are to teach, train and empower our employees. Let me start this story over using the principles of teaching, training and empowering. I give a brief summary of material Bill presented at this meeting. Bill has just told them that he was introduced to Lean Accounting at a seminar he had attended. Bill began by teaching the fundamental concepts of Lean. He explained how Lean was introduced to the Production staff and the time it took before any changes were made in the production process. He noted that some of the production processes were stopped; some were simplified or changed to take less time.

Bill said that some of the Production staff had expressed concern for their jobs. Since it took less steps and time to make the product, they thought there would be layoffs. Since it did take less time, the company was able to decrease their sales prices to their customers. Bill said with pride that production increased and company actually had to increase the Production staff much to the surprise to a few of the staff.

Bill then began to explain that he was taught that he could adapt the Lean Production principles to the Accounting processes. He asked the staff if they would be willing to try. He gave them a brief overview of what a value stream map was and showed them a sample of a value stream map. He discussed with them about the growth of the company and that more work was coming to the Accounting Department. He asked each staff member how they felt about Lean and more specifically Lean Accounting. He answered their questions which increased their confidence about the success of Lean Accounting. Although there was some skepticism, overall they seemed willing to try it. Bill told them that training would begin the next week. He asked each staff member to come prepared to discuss some procedures that could be simplified, changed or ended for the next meeting. He explained that in the next meeting they would be taught about value stream mapping and be empowered to make the changes they were suggesting. This meeting took over two hours.

As the Accounting staff left this meeting, each was thinking about the presentation and how it was going to affect their job. As they talked on the way back to the offices, they began to buy into Lean Accounting and began to believe that it might just work. What they heard from Bill’s description of Lean Accounting was three topics; that the Lean principles had worked in Production, the processing of accounting data would easier and take less time and that no one would lose their job. As Mary sat down, she began creating a list of some procedures that could be ended. Fred decided to create a flow chart of an accounting process. He hoped that during the training he could covert the flow chart into a value stream map and begin to eliminate waste. Mable had not been this excited about work for some time and could hardly sit still. The Accounting staff was very impressed by Bill’s presentation.

Initiating Lean Accounting requires more than a 15 minute overview if it is going to be successfully implemented into the organization.

DEVELOPING A MANAGEMENT TEAM WHO CREATES A LEAN CULTURE

In general terms, Lean is an improvement process that involves the concept of “continuous improvement” meaning that the purpose of Lean is to be improving some process or processes all the time. The continuous improvements are designed to eliminate processes that waste company time or resources and that a customer is not willing to pay for. It is not a one time process improvement event nor is it a technology-driven solution. “Continuous improvement” involves a fresh look at company processes all the time and a culture that embraces the needed for continuous change.

Implementation of Lean is successful when management initiates and sustains a lean culture. I found that it is difficult for management who has operated their business the same way for years to accept and be comfortable with an improvement process such as Lean. Studies have shown that some managers have even taken actions that have disrupted or undermined the implementation of Lean. The company never enjoys the profitable success that comes from using the tools found in Lean. The major difference between Lean success and failure is management’s attitude in creating and sustaining a continuous improvement culture and their knowledge of the tools used in Lean. If the implementation of Lean fails, it is not because of the staff but because of the lack of management’s sustained leadership.

The major change necessary for Lean success is management developing a culture where there is a sustained positive attitude of change. This means that some old company practices must stop and new practices start. The Lean culture has no room for managers who like to point their finger in blame when something does not appear to work properly. Management has to remove territory ownership or this is my turf attitudes.

There are principles of Lean that require the above culture to be eliminated which include some of the following:

• Continuous lean improvements will find process waste that lead to the discovery of another process waste. It becomes easy for a manager to blame the second process waste as the cause of the first process waste. The goal is to eliminate waste. Therefore, all improvements in processes should be praised where ever it is found or when ever it is found.

• To correct process waste in one department may require correcting a process waste in another department. Cooperation between department managers is critical to the success of Lean implementation.

• Lean is not just a quick fix to a problem. It is continuous improvement. If management wants lean to succeed they are obligated to embrace the cultural changes required to develop an atmosphere that encourages all employees and managers to look for way to eliminate process waste. This culture change will remove employee fear that their suggestions will end their employment or demote them to lesser positions.

• Lean is about people. Management will need to increase employee training.

• Employees will need to be empowered to make changes as the find process waste.

• Lean is eliminating processing waste which can lead to increased manufacturing capacity. It does not mean leaning out employees. Management has the responsibility of increasing sales that will lead to increased production to maintain their employees as lean increases capacity.

There are a couple of things that you can do to help management become successful at lean implementation.

One step would be to properly educate the management team on the benefits of Lean. This can come from showing how other businesses have successfully implemented Lean. It would be especially useful if a competitor has been successful with Lean. Nothing gets management in a bigger uproar than seeing a process that has help make their competition more successful, specifically a process that your management team could have implemented years ago.

Visit companies that are not competitors that have successfully implemented lean. Let management see how Lean was implemented, how it is maintained and learn how successful it has been. This may require some work to find company that will allow an extensive look into the benefits of Lean, but it would greatly aid in getting management’s buy in. Management can actually see the culture that is needed to implement lean.

Seek assistance of a consultant that is thoroughly trained in Lean and can aid in the implementation of Lean. Care should be taken when looking for a consultant trained in Lean. There are many people professing to understand but ultimately do not. Remember that after working so hard at selling Lean to management you do not want to lose the momentum to an ill informed trainer. You should thoroughly check the references of the trainer and ensure that the companies they have trained truly have seen sustained successes.

Management is the foundation of the successful implementation of Lean. Management controls change. They invite change to incur in the business, initiate change or they allow continuous change to be an integral part of their business environment. Management’s leadership and the use of the Lean tool set will lead their company into the next successful era of the company.