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Evaluation of the Lean Approach To Business Management and its Use in the Public Sector



3.1 This chapter presents the various perceptions of Lean identified within the case and pilot studies. It will highlight that there was a very broad interpretation of Lean but all had some origins in Lean thinking. It will also show that there was a general view of a clear distinction between the application of Lean in a service context and its origins in manufacturing.

3.2 It is important to identify how the interviewees within the case studies identified, perceived and described Lean in order to both place the remaining findings into context and to help identify and define Lean for the public sector.

A. Descriptions of Lean

3.3 Of all the organizations involved in the case study work, six formally recognized the Lean thinking origins of the improvement work.

"While the methodology has its roots in Lean, in the end, perhaps because of its 'Lean and mean' connotations, the phrase used to describe the methodology is the 'business change process'". ( CS4)

3.4 From the perspective of one Senior Manager in a case study, Lean was seen as a practical way of using the experiences of front line staff and customers to improve services:

"Lean thinking is such a simple concept …[using] real practitioners…what would/would not work? Why are we doing it this way? …[when there was the] formation of a new authority we had four methods of doing the same thing - first thing was to pull it together decide what was the "best of" and [need to] review after 3 years." ( CS4)

3.5 In two case studies, the managers were not formally using Lean thinking concepts and had no intention of doing so. In both cases, the management style was probably incompatible with a Lean approach, but for very different reasons. In one case, the "command and control" 5 management style aggressively forced top-down improvement activity. In the other case, a reticence to use management fads was a dominant factor:

"No formal attempt to implement Lean thinking has been made. The quality methods and systems [as outlined by Womack and Jones] constitute the main methods used to structure improvement activity." ( CS6)

3.6 The RAF case probably represented the application of Lean closest to that found in manufacturing environments, both due to the "quasi-manufacturing" processes to which it was currently being applied and in the way it was being implemented via a strategic approach.

3.7 However, the case studies illustrated how they identified with the principles of Lean (see 1.9), particularly the concepts of flow, process, identifying the customer and the need to reduce waste.

3.8 As well as the definitions, the use of management tools differs in the public sector. The case studies illustrated that the service-based approach to Lean did not necessarily use a wide range of formal management tools. Process mapping was the main one used.

3.9 In sum, there was a difference between the actual type of Lean thinking considered and used in the public service sector and that used in manufacturing. In manufacturing, the emphasis is on a set of management tools and techniques that are used to standardise processes. Within the public sector, it could be argued that, there is engagement with the principles of Lean, but not with the tools and techniques (see figure 1.1). This implies that many of the tools and techniques used in a manufacturing context are not immediately and obviously applicable to service environments. However, this is not always the case, instead, there is a suggestion that some of the tools need to be adapted to cope with the need for greater process flexibility to meet the needs of the customer. In other cases, it may be that the service sector has yet to understand the value, relevance or purpose of the tools being applied from within the toolkit.

B. Approaches to Lean

3.10 Two models of Lean implementation were witnessed to be in use in the public sector, and can be described as Full Implementation of the philosophy and Rapid Improvement.

3.11 Full Implementation of the philosophy was considered to be embedding of the principles and broad use of the tools. One of the case studies had a model for Lean that had been implemented by a consultancy, as a very careful translation of the original implementation model used by Toyota. The full implementation model is a defined process that starts with strategy formulation to determine the role of lean within the strategic vision of how the organisation needs to develop in the longer term. This vision is cascaded using a process of policy deployment that defines implementation steps and identifies areas requiring change. The full approach can use a sophisticated means of systems analysis to identify complex issues of process behaviour that dictate how best to tackle inefficiencies. Implementation is cascaded, involving the entire workforce, looking at market requirements through the concept of customer value. Improvement is achieved through analysis of the systems abilities to satisfy customers' needs. Full implementation can use Rapid Improvement Events as one method of achieving employee involvement and process improvement. However, their use is carefully defined and integrated into the overall plan.

3.12 The approach used by most sites was a Kaizen-type approach, often described as a 'Kaizen Blitz' or ' Rapid Improvement Event ( RIE)'. One case study defined Kaizen in an internal guidance booklet as:

" from the Japanese and roughly translated means 'Making something as good as it can be. It is a set of tried and tested techniques with the purpose of bringing about real and sustainable improvement in processes' . " ( CS3)

RIEs use a limited range of Lean tools to make rapid changes to small, targeted areas of a process. They focus on waste elimination and quality improvement. RIEs can be used strategically, as part of a full implementation plan. However, they are more commonly observed to be used tactically to bring about change in problem areas. Although they still use front-line staff to engage in improvement activity, RIEs tend to be more focused on short-term outcomes than longer-term developmental issues.

3.13 Therefore, the Kaizen approach uses rapid improvement events to make small, quickly introduced changes. This approach was cited by line managers as favourable as it provided a faster return for effort, was more visible and did not challenge existing management control styles to the same extent as full adoption. It was also favoured by the staff as they felt engaged in an improvement process that quickly demonstrated potential results where they had some input.

"Kaizen provides a way of making improvement manageable by cutting problems into bite-sized chunks. Kaizen works because it is a process which delivers quick and visible but also sustainable wins." ( CS3)

3.14 However, the consultancies that participated in the research reported they were frequently under pressure by clients to use, in their mind, the less effective method of implementing Lean. They all would have preferred a longitudinal, developmental approach and even though that took time it allowed the development of a sustainable Lean capability. This approach is also recommended in the literature (Annex 1). Consultants reported that managers from client organisations preferred to see specific improvements achieved more quickly.

3.15 Some consultants were even disparaging of the Kaizen Blitz method yet many of the case studies showed vast degrees of improvement by using this approach. The implementers wished to stress that the methodologies used were not achieving the full potential of true Lean but realised that the people at the sites liked, and even needed, a more tangible version of Lean that had clear milestone events and measurable short-term objectives. This was supported by the case study interviewees who stated that the approach was motivational and enjoyable. As stated by one of the pilot studies participants:

"I've been on umpteen working groups and you just felt… here we go again …but certainly with this group and approach things have moved" ( PS2)

3.16 The case studies did provide evidence that the two approaches are not naturally compatible. In particular, one of the case sites accepted that the long-term aims of its Lean programme could not be achieved purely through a succession of operational-level rapid improvement events without some form of strategic level direction. Managers accepted that their focus had been too short-term in their approach to the initial RIE. They reported that they would have liked to have restarted the first RIE to make it more strategic. Another case site successfully used their Kaizen Blitz to force through productivity improvement. In this case, there was no intention to continue with the Lean methodology once the targets had been achieved. There was only partial achievement of objectives and no staff engagement in improvement once the RIE had finished, which would make full Lean implementation very difficult to achieve in the future.

3.17 The advantage of RIE, and probably the reason why it was preferred by many of the case study organisations, is due to the perceived benefit of it overcoming the natural tendency for the public sector to adopt change slowly. However, there is a risk that the desire to overcome inertia actually inhibits the sustainability of the change and could prevent full integration of the Lean approach. Although the RIE may feel more in tune with public sector requirements, this may not be true in practice.

C. Elements of Lean

3.18 There were common methods, tools and techniques used across the case study sites which are outlined below:

Market-based demand analysis

3.19 One of the consulting methodologies that has taken hold is demand analysis. This uses customer-driven, non-rework demand to define needs and assess workload volumes.

"It is important to analyse demand and take out failure demand6. Then map process. We still don't understand demand… even after 4 years." ( CS4)

Identification and elimination of waste

3.20 Process analysis was used primarily to identify waste in each process so that it could be eliminated during improvement activity. This was seen as a way to increase the efficiency of the process and eliminate problems for staff.

"implementation of new processes rarely involves investment - get rid of waste. Eliminating waste frees up capacity. Main types of waste are failure demand…" ( CS4)

"By just concentrating on eliminating non value added steps a lot of waste can be removed" ( CS4)

3.21 Some people used the manufacturing-based "7 sources of waste" to identify types of waste. Sites using one particular consultancy firm generated different sources of waste more flexibly:

"Examples of waste:

  • Rework
  • Preparing unnecessary reports
  • Working with badly designed IT systems
  • Fire fighting
  • Working from unreliable information
  • Checking other people's work
  • Too many meetings/working groups
  • Progress chasing
  • Doing things others have already done
  • Obtaining authorisation
  • Work not fit for purpose
  • Dealing with failure demand" ( CS4)

Process-based improvement

3.22 Formal process mapping was not always used as part of the waste reduction process, although it was used informally in all cases. One case of full value-stream mapping 7 was observed.

"So the model is: enterprise level VSA [Value Stream Analysis] - understanding the way forward. If necessary, do a more detailed VSA to take it down another level. But generally get a good enterprise level VSA generated; and then use the implementation plan to plan what are the RIEs we want to do" ( CS8)

3.23 Most sites were moving from conventional departmental structures and more towards processes.

"The business change methodology works around the principle that processes can best be developed by designing around the needs of customers." ( CS4)

3.24 In healthcare, the approach to process management was possibly more sophisticated than in other sectors as a result of prior capacity and demand work and the collaborative programmes 8. Healthcare discusses process streaming:

"There will be a group of people who have fairly normal pattern come back and have their diagnosis from the nurse specialist who will then provide them with the support" ( CS7)

"We have done some outpatient clinic work for some of the teams in terms of looking at how the patients flow through outpatients. And getting them streamed for their first investigation" ( CS1)

3.25 While process improvement was the common factor across all the case studies the impact of these improvements was positioned very differently. In some cases the improvement was seen as a short term tactical achievement while in others it was explicitly seen as serving a higher purpose such as improved efficiency or better customer focus.

3.26 Notably absent from the list of universally-used concepts was that of continuous improvement. Although the majority of sites saw continuous improvement as a key element of Lean thinking, this was not always the case. Similarly, work standardization was used in a few cases, but did not feature across all sites.

3.27 Other methods used at some sites (but not all) were:

  • Process capability
  • Time observations
  • Spaghetti diagrams (to look at waste in transit)
  • Cycle time charts
  • Cellular layout ( i.e. the physical layout to promote flow)
  • Total productive maintenance
  • Zero defects (to pursue perfection)

D. Summary

  • Scottish public sector organisations made a clear link between Lean and what it could contribute to continuous improvement
  • Scottish public sector organisations applied Lean in a different way to that used in manufacturing, which suggested adaptation of the concept to fit different needs.
  • The principles of Lean were both widely understood and engaged with by employees where an attempt to implement Lean had been made, but a smaller range of improvement tools and techniques were used from the Lean toolkit when compared with the manufacturing sector (see Figure 1.1).
  • The most commonly used tool was process mapping as a means to generate an understanding of the 'process-based' view.
  • The application of Lean used by many of the case studies was that of Rapid Improvement Events or Kaizen Blitz due to its ability to encourage rapid change. Although, it should be noted that, this approach can potentially be difficult to sustain and integrate within the organisations.