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Lean Office and Service Simplified
Demystifying the application of Lean methods, Lean Office and Service The Definitive How-To Guide goes beyond the basic tools to detail the key concepts of Lean as they apply to office and service environments. It begins by discussing value stream management, followed by chapters on standard work, flow, level pull, and visual management. Winner of a 2012 Shingo Prize, this book covers essential Lean tools, including 5S and mistake proofing. It breaks down Lean concepts into their elementary components, describes them in a nonmanufacturing context, and supplies readers with specific how-to methodologies. Providing detailed examples throughout, the text illustrates the functions found in most service organizations, as well as the administrative areas of manufacturing companies. Drawing on more than two decades of practical experience, the author provides implementation strategies on a function-by-function and department-by-department basis. He examines the most common obstacles that readers are likely to encounter and supplies strategies to address those obstacles. The text includes a toolbox of helpful forms, charts, checklists, templates, and worksheets to help kick-start your Lean implementation efforts.
- GenresNonfictionBusiness
194 pages, Paperback
First published February 9, 2011
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January 27, 2025
I'm in Gas Turbine services business, where my experience with Lean has primarily been on the non-manufacturing side. Historically, lean methodologies were developed with a primary focus on improving manufacturing environments.
Despite the primary focus on manufacturing, lean can very much be applied in transactional environments. Up to 80% of waste can occur in the back office². Here is what I learned in the service business and from a great book called "Lean Office and Service Simplified" by Drew Locher
Fun facts about history of lean:
The idea of improving workflows can be traced back to the early 20th century with the work of American efficiency experts such as Frederick Winslow Taylor (scientific management) and Frank and Lillian Gilbreth (motion study). While these methods focused on productivity through task standardization, they lacked a holistic view of improving flow across entire processes.
Toyota and the Birth of the Toyota Production System (TPS): After World War II, Japan's economy was struggling, and its manufacturers were looking for ways to do more with less. At Toyota, founders Kiichiro Toyoda and later engineers Taiichi Ohno and Shigeo Shingo developed the principles of TPS, which became the foundation of Lean.
In the late 1970s, Western automakers recognized Toyota's growing success and studied TPS.
By the 1990s, Lean Manufacturing gained global traction when researchers James Womack, Daniel Jones, and Daniel Roos published the book "The Machine That Changed the World" The book detailed Toyota's methodology and introduced "Lean" as a universal term.
There are two core workflows defined in operations: the Inquiry to Order (ITO) process, which focuses on securing contracts, and the Order to Remittance (OTR) process, which ensures flawless execution and delivery of services. These workflows are complex, involve high customer interaction, and require coordination across multiple teams. By applying Lean principles to ITO and OTR processes, organizations can eliminate inefficiencies, improve customer satisfaction, and increase profitability- now the million dollar question is: how can I drive value in this business as a Lean Leader?
What Makes ITO and OTR Processes Unique?
1. Customer-Centric Workflows: Both ITO and OTR processes are heavily dependent on customer requirements and timelines, introducing variability.
2. Multiple Handoffs: Processes involve numerous stakeholders, including sales, engineering, project management, sourcing, and field services, increasing the risk of delays or miscommunication.
3. High Complexity: Managing contracts, customization, technical specs, logistics, and performance metrics makes these workflows more intricate than typical service processes.
a. Applying Lean to the ITO Process to resolve unique challenges:
The ITO phase involves responding to customer inquiries, scoping the work, and preparing competitive bids and contracts. This phase can be slowed by bottlenecks like excessive review loops, unclear roles, and a lack of standardization.
1. Value Stream Mapping to the rescue:
In my experience, during VSM, the sales team can identify significant delays caused by repeated reviews of commercial and technical proposals. Lean analysis reveals duplicate work due to unclear handoff points between engineering and sales teams.
Lean Solution: Introduce a RACI chart (Responsible, Accountable, Consulted, Informed) to clarify team roles and responsibilities. This eliminates confusion and reduces redundant reviews.
2. Standard Work nowhere to be standardized:
In proposal preparation stage of the ITO, each customer requires a detailed breakdown of turbine services, parts, and costs.
Lean Solution: Standardizing templates for proposals reduces variation and ensures key details (e.g., terms, timelines, scope of work) are not missed. Proposal cycle time can be cut up to 20% by standardization, and customer satisfaction improves due to faster responses.
3. Kaizen remedy for Contract Approval Bottlenecks:
A Kaizen event reveals that contract approvals often take two weeks due to lengthy legal reviews, even for standard clauses.
Lean Solution: Establish a library of pre-approved legal terms for frequently requested services. Contracts requiring standard clauses bypass legal review, saving significant time.
b. Applying Lean to the OTR Process to resolve unique challenges:
The OTR process is critical for delivering on promises made during the ITO phase. This phase often struggles with coordination issues, delays in parts sourcing, and lack of visibility into work progress.
1. "5S"ing OTR Documentations
Field engineers can spend hours searching for site-specific service histories, drawings, or part numbers.
Lean Solution: A centralized digital repository is organized using 5S principles: documents are sorted, named consistently, and categorized by turbine model and customer. Field engineers can reduce document search time by 40%, leading to faster issue resolution on-site.
2. Flow and Pull Systems for Parts Management
Delays in turbine repairs are often caused by missing spare parts or incorrect inventory levels.
Lean Solution: Implement a Kanban system to manage spare parts inventory, ensuring high-use items are replenished as soon as quantities fall below a set threshold. The frequency of on-site delays due to missing parts can drop by 50%.
3. Standard Work for Job Site Execution
Field service teams often face inconsistencies in how site inspections are carried out, leading to quality issues and rework.
Lean Solution: Develop a standardized checklist for field tasks, such as inspecting combustion liners, monitoring vibration data, and calibrating instrumentation. Work is completed right the first time, reducing the need for repeat site visits.
Fun Memory for Standardization: Regardless of which section of the business I am trying to standardize, one of the most common objections I receive is: "Standardization is killing creativity". It was a revelation to see that this sentence is also included in this book as a mindset to overcome! :)
Key Lean Tools for Services Processes:
Selecting Lean tools to highlight is a challenge for me. But here is some good examples of how lean tools are applied in services environment:
1. Problem Solving:
Example of use: A recurring issue with late deliveries of turbine blades is addressed using an Problem Solving Methodology. Root cause analysis reveals that purchase orders are created late due to delays in engineering approvals. Automating purchase requests based on project milestones ensures timely ordering.
2. Kaizen Events:
Example of use: A Kaizen event in the logistics process identifies inefficiencies in coordinating shipments of large turbine components. Cross-functional collaboration leads to better communication between suppliers and logistics providers.
3. Visual Management with Kanban:
Example of use: A Kanban board tracks each service order's progress across stages such as "Customer Approval", "Parts in Transit", " On-Site Execution", and "Final Billing". Managers use this board to identify bottlenecks in real time and reallocate resources accordingly
Conclusion
Lean principles bring structure and clarity to the inherently complex ITO and OTR processes in the gas turbine services business by eliminating waste, standardizing tasks, and improving coordination. Whether it's speeding up proposals, ensuring parts availability, or executing service work flawlessly, Lean tools provide the foundation for a more agile and responsive organization. And change management still is the hardest problem organizations need to endure at the end of the day.
Despite the primary focus on manufacturing, lean can very much be applied in transactional environments. Up to 80% of waste can occur in the back office². Here is what I learned in the service business and from a great book called "Lean Office and Service Simplified" by Drew Locher
Fun facts about history of lean:
The idea of improving workflows can be traced back to the early 20th century with the work of American efficiency experts such as Frederick Winslow Taylor (scientific management) and Frank and Lillian Gilbreth (motion study). While these methods focused on productivity through task standardization, they lacked a holistic view of improving flow across entire processes.
Toyota and the Birth of the Toyota Production System (TPS): After World War II, Japan's economy was struggling, and its manufacturers were looking for ways to do more with less. At Toyota, founders Kiichiro Toyoda and later engineers Taiichi Ohno and Shigeo Shingo developed the principles of TPS, which became the foundation of Lean.
In the late 1970s, Western automakers recognized Toyota's growing success and studied TPS.
By the 1990s, Lean Manufacturing gained global traction when researchers James Womack, Daniel Jones, and Daniel Roos published the book "The Machine That Changed the World" The book detailed Toyota's methodology and introduced "Lean" as a universal term.
There are two core workflows defined in operations: the Inquiry to Order (ITO) process, which focuses on securing contracts, and the Order to Remittance (OTR) process, which ensures flawless execution and delivery of services. These workflows are complex, involve high customer interaction, and require coordination across multiple teams. By applying Lean principles to ITO and OTR processes, organizations can eliminate inefficiencies, improve customer satisfaction, and increase profitability- now the million dollar question is: how can I drive value in this business as a Lean Leader?
What Makes ITO and OTR Processes Unique?
1. Customer-Centric Workflows: Both ITO and OTR processes are heavily dependent on customer requirements and timelines, introducing variability.
2. Multiple Handoffs: Processes involve numerous stakeholders, including sales, engineering, project management, sourcing, and field services, increasing the risk of delays or miscommunication.
3. High Complexity: Managing contracts, customization, technical specs, logistics, and performance metrics makes these workflows more intricate than typical service processes.
a. Applying Lean to the ITO Process to resolve unique challenges:
The ITO phase involves responding to customer inquiries, scoping the work, and preparing competitive bids and contracts. This phase can be slowed by bottlenecks like excessive review loops, unclear roles, and a lack of standardization.
1. Value Stream Mapping to the rescue:
In my experience, during VSM, the sales team can identify significant delays caused by repeated reviews of commercial and technical proposals. Lean analysis reveals duplicate work due to unclear handoff points between engineering and sales teams.
Lean Solution: Introduce a RACI chart (Responsible, Accountable, Consulted, Informed) to clarify team roles and responsibilities. This eliminates confusion and reduces redundant reviews.
2. Standard Work nowhere to be standardized:
In proposal preparation stage of the ITO, each customer requires a detailed breakdown of turbine services, parts, and costs.
Lean Solution: Standardizing templates for proposals reduces variation and ensures key details (e.g., terms, timelines, scope of work) are not missed. Proposal cycle time can be cut up to 20% by standardization, and customer satisfaction improves due to faster responses.
3. Kaizen remedy for Contract Approval Bottlenecks:
A Kaizen event reveals that contract approvals often take two weeks due to lengthy legal reviews, even for standard clauses.
Lean Solution: Establish a library of pre-approved legal terms for frequently requested services. Contracts requiring standard clauses bypass legal review, saving significant time.
b. Applying Lean to the OTR Process to resolve unique challenges:
The OTR process is critical for delivering on promises made during the ITO phase. This phase often struggles with coordination issues, delays in parts sourcing, and lack of visibility into work progress.
1. "5S"ing OTR Documentations
Field engineers can spend hours searching for site-specific service histories, drawings, or part numbers.
Lean Solution: A centralized digital repository is organized using 5S principles: documents are sorted, named consistently, and categorized by turbine model and customer. Field engineers can reduce document search time by 40%, leading to faster issue resolution on-site.
2. Flow and Pull Systems for Parts Management
Delays in turbine repairs are often caused by missing spare parts or incorrect inventory levels.
Lean Solution: Implement a Kanban system to manage spare parts inventory, ensuring high-use items are replenished as soon as quantities fall below a set threshold. The frequency of on-site delays due to missing parts can drop by 50%.
3. Standard Work for Job Site Execution
Field service teams often face inconsistencies in how site inspections are carried out, leading to quality issues and rework.
Lean Solution: Develop a standardized checklist for field tasks, such as inspecting combustion liners, monitoring vibration data, and calibrating instrumentation. Work is completed right the first time, reducing the need for repeat site visits.
Fun Memory for Standardization: Regardless of which section of the business I am trying to standardize, one of the most common objections I receive is: "Standardization is killing creativity". It was a revelation to see that this sentence is also included in this book as a mindset to overcome! :)
Key Lean Tools for Services Processes:
Selecting Lean tools to highlight is a challenge for me. But here is some good examples of how lean tools are applied in services environment:
1. Problem Solving:
Example of use: A recurring issue with late deliveries of turbine blades is addressed using an Problem Solving Methodology. Root cause analysis reveals that purchase orders are created late due to delays in engineering approvals. Automating purchase requests based on project milestones ensures timely ordering.
2. Kaizen Events:
Example of use: A Kaizen event in the logistics process identifies inefficiencies in coordinating shipments of large turbine components. Cross-functional collaboration leads to better communication between suppliers and logistics providers.
3. Visual Management with Kanban:
Example of use: A Kanban board tracks each service order's progress across stages such as "Customer Approval", "Parts in Transit", " On-Site Execution", and "Final Billing". Managers use this board to identify bottlenecks in real time and reallocate resources accordingly
Conclusion
Lean principles bring structure and clarity to the inherently complex ITO and OTR processes in the gas turbine services business by eliminating waste, standardizing tasks, and improving coordination. Whether it's speeding up proposals, ensuring parts availability, or executing service work flawlessly, Lean tools provide the foundation for a more agile and responsive organization. And change management still is the hardest problem organizations need to endure at the end of the day.
January 13, 2015
Good introduction to Lean tools. One of the better books I've seen to help you translate process improvement into the office setting. Some of the material is a little dated now as nearly everything focuses on paper and few items talk about how to deal with workflows that are completely electronic.
November 5, 2020
Cultivate a culture of continuous improvement. Focus on growth mindset, becoming digital tech savvy, and being agile.
Lean is not a program. Because a program by definition has a beginning and an end.
Four steps: stabilize, standardize, visualize, continuously improve.
Too often we rush to the Do part of the process but planning requires patience. Ask the 5 Whys.
In the Do phase determine What, Who, When.
In the Check step, assess what you have done.
The Act step acknowledges solving a problem, setting a new standard and training people accordingly.
With training, follow the cycles: observe, participate and perform the task completely.
Lean is not a program. Because a program by definition has a beginning and an end.
Four steps: stabilize, standardize, visualize, continuously improve.
Too often we rush to the Do part of the process but planning requires patience. Ask the 5 Whys.
In the Do phase determine What, Who, When.
In the Check step, assess what you have done.
The Act step acknowledges solving a problem, setting a new standard and training people accordingly.
With training, follow the cycles: observe, participate and perform the task completely.
July 14, 2023
Este texto ofrece una introducción sólida y práctica a la metodología Lean en un entorno de oficina. Presenta conceptos complejos de manera comprensible y proporciona ejemplos prácticos que facilitan la implementación de la teoría. Sin embargo, el libro puede resultar un tanto repetitivo y la variedad de casos de estudio podría ser más amplia. Por otra parte, algunos lectores pueden encontrar que se centra demasiado en ejemplos estadounidenses, lo que puede limitar su relevancia en otros contextos culturales o empresariales. Aún así, es una lectura valiosa para aquellos que buscan mejorar sus operaciones de oficina a través de Lean.
Displaying 1 - 4 of 4 reviews