THE LEAN ENTERPRISE CONCEPT

Productivity - The Result of Speed of Service
In Lean Enterprises

Håkan Södersved, Expira AB

ABSTRACT

 

Original paper given at the World Productivity Congress, in Stockholm 1993

 

Principal Topics

The aim is to provide a simple strategy for measuring and improving productivity of service as a function of lead time, overhead costs, number of tasks (or units) in process and the input (outsourcing) costs involved. The lead time is dependent on the efficiency of the interactive communication and co-operation of the persons in the organization. It is also dependent on the level of multiskill capability of the employees. It is dependent on the variability and capability of the quality characteristics of the business processes. A team based organization gives a higher speed of service than a line management organization of the old tayloristic model.¨

 

Just In Time or 'Lean' is a buzzword until you learn the change process of reaching it. Added value is the source of income for most people, but it is also the source of high costs and bad competitive position. We must learn to constantly reduce error rates, obstacles, bad procedures, bureaucracy and eliminate bottle necks out of our organizations to improve productivity.

 

This requires increased knowledge and skill in the subject matter and efficient IT-tools. Increased knowledge also means statistical and predictive methods for improving processes in the long term. Knowledge is information valid for prediction of the future. Skill is a result of training and exercise. Teamwork is an effective way of balancing the level of knowledge. New knowledge should come from outside.

 

Theory, Data and Method

To get a larger understanding of the importance of short lead times, we have to study the basic theory for unit cost of production or service. We consider the whole organization as one team due to increasing interaction of teamwork for speed of service and production. The theory mostly used in continuous flow of mass production is based on three factors: input, total overhead, work in progress and lead time. 

 

Implications

By applying the method to all organizations and their processes, main factors of costs, speed and productivity can be identified and simplified. Choice between different strategies of quality and productivity improvements becomes easier. The balance of quality investments in respect to reduced lead times can be optimised. It can be used to alternate strategic approaches for effective teamwork on different problems. It can be used for optimisation of teaching and learning processes by different methods for different groups of people. Service organizations in community medical care, education, public service, etc can improve their economic awareness.

 

About the company

EXPIRA AB Lean Six Sigma is an education and consultant company in Stockholm in the field of quality and productivity. Seminars and Consulting in Six Sigma Implementation, Lean 'Pull' Production, Quality Leadership, Teamwork, Lean Production, Statistical Thinking and Methods, Software Tools, Literature and Training Aids are parts of the program.

 

This LEAN White Paper may be ordered here, á 150 SEK + VAT        Order

 

 

Håkan Södersved

President

Expira AB

Lean Six Sigma