What does ‘lean’ mean? It means maximising the value of a product or service provided to a customer while simultaneously minimising any form of waste present in the process that produces such a product or service.
Lean management is a philosophy and an operational discipline aiming at structuring an organisation, public or private, in a ‘lean’ fashion.
Its main targets are: maximisation of value to the customer; drastic elimination of waste in all processes that generate value for customers; elimination or drastic redimensioning of all those processes and functions that do not contribute to generate value to customers; minimisation of all times; and zero defects, errors and non-conformities.
While many organisations in industrialised countries worldwide are striving or attempting to undergo the lean road, what is happening in Malta in this regard? Not much.
Lean is not a mission impossible. Lean is basic common sense in business. Unfortunately, it can be easily misinterpreted. If one asks top managers of private organisations whether they think they are lean, most, if not all, will answer, “Yes, of course we are lean: we dedicate utmost care to our customers and we are organised in an extremely efficient way.” Generally, it is not the case.
Manufacturing industry
The amount of wasted manpower is still high: plant and machinery breakdowns and malfunctions are still at unacceptable levels; set-up times are still too long; quality defectiveness, non-conformities and rejects are far from the zero-defect lean target; lead times and throughput times are longer than acceptable by customers; and management-related waste (bureaucracy, meetings, paperwork, bad planning) is typical of any ‘traditional’ enterprise.
Project/construction industry
Things are not much better in this sector. This industry has, in some ways, not completely shifted from craft to mass production – much less to lean production. On the other hand, the industry has followed the mass production model in its extensive division of labour and hierarchy-based management – Smith and Taylor style. The consequences? – cost overruns, delays on schedules, and waste.
Does one often hear of a project completed on time, within budget and with total client satisfaction? No, very seldom. How much wasted manpower is there in the project/construction industry?
If you spend some time observing workmen on any construction site, on a random day, at any random time, you will come to the conclusion that +/- 65 per cent of manpower is wasted.
Yes, 65 per cent of totally wasted manpower – wasted in idling, searching, moving, talking, double and triple handling, preparing, organising, giving directions, making mistakes, reworking mistakes and not adding value to the objective of the project.
Service industry
It would appear that good customer care in Malta is something associated only with individual performance of exceptional frontline personnel, rather than being a systematic and strategic approach.
Bad service provided by insurance companies, health institutions, hospitality establishments and many other service providers is so common that customers are used to it and don’t even notice it anymore: it’s simply ‘normal’ and well-accepted. Tragic.
Lack of customer care and bad service come in multiple forms: delays of any nature and duration; mistakes of any sort; arrogance in many service establishments, from telephony providers to retailers and dry-cleaners; referrals of any form of complaint to higher management because, obviously, front-line personnel cannot deal with astronomical issues like a complaint; missed promises to customers, such as “I will definitely give you an answer by tomorrow”; and bad manners.
Gloomy picture? Let’s rather call it realistic, when observed from a lean management point of view.
What is the problem? Organisations seem unable to cope with the complexity associated with the changing environment.
The more pressure is put on them and the more corrective measures they try to adopt, the worse the results and the more the failures.
The only way out of this vicious circle is a revolution in the opposite direction. That’s where lean management comes to the rescue.
Dr Scodanibbio and Mr Micallef will conduct a series of Lean Management training courses next year, starting in May. For more information, visit www.scodanibbio.com/malta2011.