The idea for businesses to be waste-free in terms of their approach to conducting operations has been existing for centuries, but was refined in Japan by Toyota in late 1940s. Since the introduction of Just-In-Time model, many businesses started adapting it to business models to a great effect. Today, Lean is one of the most effective ways in the corporate world to make the processes of the organization more streamlined, cost-efficient, innovative and waste-free.
According to Professor Peter Hines, who is a globally recognized leader in Lean thinking, there are evolutionary and revolutionary ways of thinking to enable transformational change in organization. Today we are going to look at 7 evolutionary trends that are transforming Lean going into 2019.
Trend 1: Lean is evolving to match faster industry environment
The constant evolution of markets and the impact of digital media are affecting the preferences, needs and desires of consumers. The shift in culture and the way people conduct business is changing faster than ever before, which means that businesses need to keep up the pace.
Lean was designed to deal with addressing the immediate issues of process and product standards, with the aim of eliminating the costs of poor quality, waste of resources and short lifecycle.
However, this emerging trends is about to change the focus to providing the highest possible ROI and assessing the changes in the organizational process to produce the required outcomes.
The reason for these changes in Lean practice is the external environment that is comprised of businesses and customers. Products and services are shifting to shorter lifecycles, which means that the traditional Lean approach should change too. Long project stages aimed at transforming processes are becoming not viable, meaning the development of shorter, more compact stages.
All of that means that Lean is starting to be seen by businesses as means to obtaining a system which is capable to meet their ever-changing and accelerating targets on a consistent basis. This trend can be seen as a challenge for companies that have a well-established process structure, but is also an opportunity for process improvement and higher ROI.
Trend 2: New processes are being adapted, aimed at making Lean even more responsive
Based on the aforementioned trend, Lean is transforming to encompass new facets of business, going beyond what it originally represented and focused on.
With customers and suppliers looking for more customized, flexible and innovative solutions, Lean is becoming more responsive to match these requirements.
This allows businesses to take on new challenges and become more skilled and efficient in their process optimization techniques, being able to adapt on the fly. With the process lifecycle shortening, businesses now are starting to utilize the practice of frequent iteration within their projects. This leads to incremental process improvements that have a significant impact over time. Traditional metrics are being phased out with the introduction of dynamic analytics to enable businesses to have a better control and intelligence.
Another trend that is welcome by many is the issue of the resource efficiency, where businesses would only use a small percentage of products and assets at their disposal. This is not isolated to just day-to-day work, but also affect recruitment, training, development and HR processes.
Eliminating waste and utilizing resources more effectively leads to reduced overheads and increased profit margins, allowing businesses to reflect this in keeping their pricing on a competitive level and thus becoming a more attractive option for their customers.
All these changes result in managers becoming more empowered and more intuitive when it comes to reacting to change in circumstances. Whether or not they are willing to adapt to these changes is an issue many organizations will have to face in 2019.
Trend 3: All industries are affected
Despite its industrial beginnings, Lean goes far beyond factory floor. These days Lean has become industry-agnostic, due to the process being so diverse. Because Lean has grown to involve various aspects of business it has become applicable to the needs of any industry.
It is not unusual to see Lean being effectively utilized in leisure, retail, commercial, hospitality, pharmaceutical, tourism and construction industries, having evolved from being focused solely on manufacturing.
Trends 4: Small businesses are starting to introduce Lean to their processes
One of the areas of business where Lean has so far failed to make a big impact is SMEs sector. However, this is starting to change with more small and medium enterprises introducing Lean to their processes, having realized the benefits it can bring to their organizations.
Many SMEs are still wary about Lean, expressing concerns about its application, the resources required, and the potential risks of unsuccessful process change.
However, as awareness of Lean application and benefits grows, it is to be expected that more and more SMEs will feel confident about integration of its programs into their process.
Trend 5: Digital is becoming a bigger factor
The vast majority of businesses are falling behind the industry-leading players without even noticing it. By not utilizing the latest new technologies and adapting their business processes to integrate them into a day-to-day operations, organizations are putting themselves at a disadvantage to those who do. What’s more, lean plays a big role in how this process can be done to maximize the impact digital has on businesses.
The introduction of technologies and digital economy, businesses are urged to work not just harder, but smarter, with a strong focus on eliminating wasteful processes and focusing on value-added systems.
Interestingly, it’s not just the existing businesses who transform their processes aiming to become more efficient in their approach, but many digital-focused start-ups, who realize the benefits Lean thinking can provide them with.
Trend 6: Employee engagement is a big factor
In order for any significant process change to be successful, companies’ management staff need to realize how important it is to get everyone involved on the same page of Lean thinking.
Conservative-minded managers might want to re-think their approach to undertaking major business reformations, where employees and lower-levels managers are left in the dark. Numerous projects have flopped or at least failed to achieve its intended targets over years, for a simple reason that employees were not informed and consulted about the importance of their role in the whole endeavor. Industry leaders always knew of that issue, but it’s a welcoming sight to see other companies following suit.
Staff is an incredibly valuable resource and a “pull” strategy is gathering momentum amongst many organisations who encourage their employees to initiate change and innovation through their feedback, experience, and ideas. Employee empowerment is a very important attribute of a Lean-thinking organization.
Trend 7: Training is what it is all about
Following on the previous trend of employee engagement, employee training is another opportunity for businesses to reduce waste and increase productivity. Moreover, developing implementation skills amongst their employees can lead to stronger initiatives, motivations and growth within the company.
However, before that sort of program is carried out, a brainstorming meeting with the management team should be conducted and important topics on how such training will be completed should be discussed. Who is involved in training? Is there one training program for all employees or is it department/qualification based? How long will it last? What is the expected end goal? What resources will be allocated to it?
These are all very serious questions that need to be answered at the very beginning. It is important for employees who this training is being developed realize its value and the reasons behind it.
Lean training can be treated as a boost for an organization willing to develop its internal resources with the aim to optimize its processes and grow. Making a good use of what you have internally is also much cheaper than looking for solutions externally.
In many ways Lean training is one of the cornerstones of Lean thinking as it focuses on adding value to the company and preventing the waste of valuable talent within the organization.
What started as a manufacturing production improvement process in 1940s, has rapidly transformed into becoming a way of thinking that businesses in any given industry can apply to improve and grow. Lean has evolved to the stage where companies form their business models around it trying to differentiate themselves from other organizations in the industry, gain competitive advantage, and be more responsive to the customers’ needs and demands.
2019 will be a big year for Lean with many of the trends mentioned in this blog gaining pace even further, with businesses who realise the importance of operational excellence anticipating big rewards.
For more resources on Lean, visit our OpEx section of Knowledge Hub right here.