This is the most important thing you need to know as an operations consultant. Bold statement I know, but Lean is such a pivotal and fundamental point that it cannot be overstated. It is a philosophy of management, corporate culture, set of tools, and a useful way to think of process improvement. While six sigma focused on reducing variability – making everything the same – lean takes the opposite approach.
What’s critical-to-quality (CTQ)? Lean is obsessively focused on doing only what is critical and what is valued by the customer. The way of thinking inherently believes in opportunity cost. You should only do what matters (to the customer). Put another way, if the customer wants 100, you should deliver 100. If you deliver 110, you wasted effort. While marketers would argue that you should exceed expectations and over-deliver, the lean consultant disagrees. The lean fundamentalist asks, “What is the customer really willing to pay for?” Anything more than that is really waste.
How do you know what the customer wants? Simple, ask.
There are lots of waste. Clearly, there are many different ways that people waste time, money, resources, but a here is another way to think about the problem. The acronym is a simple T-I-M-W-O-O-D, but the Japanese call it MUDA.
- Transportation: Moving the product around unnecessarily is a waste of time, effort, and increases the likelihood that it will be damaged
- Inventory: Any unused materials is wasted capital. It is money just sitting around in the form of raw materials (0% complete), work-in-process (50% complete), or finished goods (100% complete).
- Motion: The “wear and tear” on the equipment or the people involved in the process. If you are transporting the product around unnecessarily, you are also wasting the motion of the trucks, fork lifts and warehouse workers.
- Waiting: Time that the product is sitting there – not being transported or processed. This is a large source of waste in physician offices.
- Over-processing: Doing more to the product than is necessary.
- Over-production: Making more than is necessary, usually because the production batches are too large
- Defects: Imperfect production that requires re-work, or doing work again
This might sound very text book, and it is. It’s just a TIMWOOD way to remember all the different types of waste, not just of material, but also of time and movement.
An office example: A patient drives to the doctor’s office, but goes to the wrong office (wasted transportation) and brings a lot of unnecessary paperwork not needed (over processing). The physician is late, so the patient waits an extra 20 minutes (waiting), and the nurses are chatting because they don’t have any work (inventory). The physician orders 3 blood samples, but the phlebotomist takes 4 samples just to be safe (over production), while also missing the vein for the blood draw (defect).
Consultants are bad at this. Many of us are perfectionists by personality. While it makes sense to fiddle with PowerPoint slides until they are coherent, smart, data-driven narratives, but is it really necessary to have a perfect email box? Is it a must-have to have the excel data file neatly organized with beautiful, perfectly aligned, shaded in column headers? Are you really making a difference by reading the 5th piece of research that says the same thing? Think, and abbreviate your actions.
What does the client value? When possible, ask yourself what the customer values and is willing to pay for. Likely, client are more willing to pay for recommendations that can implemented, not sparkling analyses. Find the CTQ, and get rid of the MUDA.