Many acclaim lean management as revolutionary in its approach, some see it as the "next" management fad; whichever way you view it, many organisations are reaping the benefits of successful implementation. Lean experts claim that successful implementation results in reduction of lead times by up to 90 per cent, reduction of floor space requirements by 30 per cent and reduction of works in progress by up to 80 per cent; all this resulting in an increased productivity of up to 125 per cent. But what do these numbers actually mean and are they realistic in the local scenario.

In the traditional sense increases in productivity are only possible through investment in more machinery or more personnel - the lean approach claims that the increases are derived from making the best out of the available resources. In fact this concept distinguishes lean from management styles that are designed to cut costs. Although cost cutting techniques do achieve results, they are usually associated with low morale amongst the work force and function only in the short term.

Lean management is positive in its approach where the processes are analysed in order to identify any steps that do not contribute any value to the end customer - identification of waste. This exercise always yields good results and many companies end up freeing many resources which can then be used to increase productivity and increase the product or service range.

How does one know waste when one sees waste? The problem is that in some cases we have grown so accustomed to it that we think it is normal, acceptable or inevitable. For this reason, a number of waste classification methods have been developed in order to help us through this task. Ohno's seven wastes (referred to as 7W) are the most common; however a number of new classification systems are being developed when lean is applied in "newer" circumstances, such as offices, government institutions, voluntary organisations.

The seven wastes are classified as follows:

• Overproduction: not producing according to customer demand.

• Waiting and idle time: refers to human resources and machinery.

• Transportation: unnecessary handling and moving of materials.

• Inventory: unnecessary raw materials in stores, work in process (WIP), and finished goods.

• Motion: referring to movement of equipment or people. .

• Over-processing: unnecessary processing or procedures.

• Defects: the cost of producing or reworking defects.

When our processes are analysed with a trained eye against these wastes one soon realises that many are actually a question of mentality or mind-set. How many times have you produced that "extra" amount of product "just-in-case" or purchased that extra amount of raw material that ensures that you will never end up without? How many times did that product remain in your stores gathering dust, risking damage or losing shelf life? Unfortunately our quest for a safety net makes us fall into the trap of producing our product or service according to our personal needs rather than customer demand.

While viewing a television documentary I was impressed with how some companies have managed to take the issue of overproduction and inventory to the extreme. These car manufacturers order the required seats for their cars one day before they are required and they are delivered just a few minutes before their assembly is scheduled. Admittedly one has to note that the whole supply chain must be fully synchronised and working very efficiently, but I find this a very good example of the concept that we must be striving for locally. The same applies to any extra finished goods produced which more often than not end up as sale items just before their expiry or product lifetime.

Another issue that is of great relevance to the local scene is the issue of over-processing. This waste refers to anything that is done to your product or service which is extra, adding no value to the end customer but making it more expensive. An example that comes to mind is the extra or beautiful packaging that comes along with many items that we buy daily. Although packaging is a must and is a very relevant issue in marketing, is it really necessary to pack an mp3 player in a box that is ten times its size adorned with the most beautiful graphics and the most expensive cardboard? Isn't the customer going to throw away that packaging as soon as the item is bought?

Although the seven wastes have originally been identified for the manufacturing industry, they can easily be applied in any organisation. In fact services are usually associated with a large amount of waste in the form of extra paperwork or passing of tasks between different departments. The applications of lean are now limitless having found potential in voluntary organisations, local councils, healthcare and government departments, where the potential for waste reduction is vast and the benefits are great.

It can be easily agreed that the potential for waste reduction and the potential for increased productivity is great in Malta where lean transformation is not an option but a necessity.

Mr Zarb-Piscopo is director of Nascence Training and Development specialising in "lean management" courses.

info@nascencemalta.com, www.nascencemalta.com.