Typical business environment – how to overcome it successfully?

Martin Luts – Head of Operations

Today’s fast and innovative business environment is full of possibilities and options. However, there are also plenty of challenges. One of the main goals of a company is to generate profit and in order to do that, one must reduce costs and increase revenues. Sounds easy, doesn’t it? However, it is not quite that easy in practice. This requires one to manage their work and company as effectively and cost-efficiently as possible.

What is LEAN?

LEAN management means “timmitud tootmine” in Estonian.  It is a world-renowned management philosophy and its key phrases include creating value, ensuring quality and client satisfaction, increasing competitiveness, and a sustainable and constantly evolving company. According to LEAN philosophy, improvement never ends, it is an continuous activity. Even if something is already quite good, it can always be better.

One of the main keywords and missions of LEAN management is the Japanese word “kaizen”, which means constant development and pursuit of perfection. This school of thought originates from Japan, more specifically from the Japanese automotive company Toyota. Thanks to the LEAN management philosophy, Toyota became the flagship of the automotive industry.

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LEAN is a management philosophy that is being successfully and effectively used in the manufacturing, service, as well as the logistics sector. The utilisation of LEAN management philosophy is a means to increase the export capacity of the company as well as for finding value added products and services.

7 tips on how to integrate LEAN

Omniva began the implementation of LEAN management in 2013, therefore, we have already seen plenty of progress by now, as well as received confirmation that it was definitely the right choice.

  1. Define the goal

Before beginning the implementation of LEAN, it is important to establish a goal of what exactly is in need of change and what results one wishes to reach over a certain period of time.

We established two goals:

a) increase the efficiency of logistics operations, which is reflected in the average price per one shipment;

b) increase employee satisfaction and commitment.

  1. Include a consultant

It is appropriate to include a consultant who would carry out employee training and help to figure out the best techniques for your company. It is important to know that there are no universal techniques that would have the same effect on all companies. Each company shall choose and adjust LEAN techniques according to their own needs. Practical experience is essential when it comes to recruiting a consultant. They are unable to help the company based on purely theory.

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  1. Appoint a LEAN guru

Aside from the consultant, it is important that the company would have at least one employee who is responsible for the implementation of LEAN, i.e. a LEAN guru. Their task is to organise meetings, employee trainings, carry out audits and ensure the development of LEAN management at the company. Their role will become especially important once the consultant has left.

  1. Include and motivate employees every step of the way

It is important that the employees who will begin using LEAN on a daily basis would be motivated to adopt the change. One of the biggest fears is whether LEAN will be accepted? At Omniva, LEAN was first introduced in one production unit and is now evolving and extending to other units and departments. The production unit acted as a stepping stone, a test environment, in order to see whether LEAN will become operational or not. Today we can say that the employees of said unit can no longer imagine their day-to-day work without LEAN.

  1. Involve senior management

Once the first steps have been made, it is important to exhibit success stories and also involve senior management in the subsequent implementation process. This is necessary in order for the whole company to think alike and to provide necessary priority to the implementation of LEAN. It is recommended to make that the first step. However, it can be seen in our example that implementation can also be successful if senior management is involved after initial successes.

  1. Have patience

The implementation of LEAN is a serious undertaking and it requires time as well as commitment. It is said that the implementation of LEAN takes at least three years before it yields tangible results.

  1. Train, train, train!

Our first intensive training for a group of 15 members took place over three months. We continued independently thereafter, sometimes asking the consultant for advice. The majority of the company’s key figures have by now undergone training. Trained employees are now introducing LEAN ideas to other employees.

What did we gain?

Efficiency increased

We managed to increase efficiency and reduce waste through various projects. For example, we managed to decrease the time it took to find tools at the sorting centre by several times with the help of 5S methodology. Or as another example, we analysed a courier’s working day step by step with the help of SMED methodology, and realised that the constant need to set the parking clock took up a great deal of time. The uptake of electronic parking clocks reduced the daily working time of each courier by up to 30 minutes! Savings are made up of little victories

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Increase employee satisfaction and commitment.

One of the biggest successes of LEAN implementation was the fact that interdepartmental cooperation and understanding improved during the trainings, i.e. it served as a strong team building exercise. Employees who have undergone training think alike, understand the direction that the company is moving towards and the objectives of their own and their colleagues’ workflow.

Quality of service improved.

It is very important to us that our clients are happy with us. We measure the quality of our services and the quality indicators of all services have improved. LEAN has helped make the day-to-day work of employees more targeted and we can thus see positive changes in our results as well. Problems are solved more quickly and there is a better overview of established goals. The focus is rather on planning and prevention than on putting out fires. The employees are more aware of the importance of client satisfaction. In our example, a balanced scorecard and LEAN can also be successfully integrated.

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TAKE NOTE

A couple of examples of the LEAN techniques that we use on a daily basis

  1. Organisation of work stations (based on 5S logic)
    The simplest and most used LEAN tool. Involves the organisation, logical placement and marking of work stations.
  2. Visualised measures on boards
    The measurement and visualisation of activities and goals. The visual presentation of key factors necessary for reaching a goal displayed in a simple and comprehensible form.
  3. Short morning meetings on a daily basis
    Separate meetings are first held at the level of shift managers and departments. The work of the previous shift and the results of the previous day will be discussed. The results shall be reviewed at unit level thereafter. Corrective actions will be established and persons responsible will be appointed.
  4. The use of problem-solving methodologies (PDCA and A3)
    We often use PDCA and A3 methodologies for analysing more serious problems, as well as for figuring out and solving core issues and setting up new standards.
  5. Process improvement methodology (SMED)
    We use SMED for analysing the possible acceleration of a certain action by reducing waste and excluding all unnecessary aspects.
  6. LEAN group comes together once a week
    New ideas will be discussed, a common issue shall be addressed.

I would strongly recommend this tool for companies who have not yet discovered LEAN but who are looking for methods to increase the efficiency of their processes and improve the organisation of teamwork.