Management Blog and case study

Lean management, formalized in the 1990s in the United States, was first introduced in Japan through the Toyota production system (1962) for the automotive industry.

Lean philosophy is in no way synonymous with fixed mechanics; instead, it is a management approach based on simple principles aimed at increasing the productivity and quality of a business.

In recent years, several other industries adopted the concept, including the construction, health, and professional services sectors.

The migration of this philosophy to other business lines is strongly associated with three basic principles, the « Muda – Muri – Mura »:

• Muda: Eliminating anything that is without value
• Muri: Eliminating excess of any kind
• Mura: Eliminating enforcement irregularities in processes

The link between the computerized management of your operations and the principles of Lean management lies in key features in your solution and your operating ERP software. First and foremost, let us delve a little deeper into each of the principles outlined above.

 

Muda – Eliminating Waste

The approach combines the concept of “waste” with seven so-called “classic” business management activities. This does not mean that these seven activities are automatically present in your business:

• Transportation
• Inventory management
• Ergonomics of work in action
• Waiting periods or delay in the deliverables (client or supplier)
• Overproduction (volume of goods or services)
• The process in its overspecialization
• Non-quality

A progression towards Lean management will address waste as a priority and therefore seek to identify the largest source of waste for quick and efficient processing.

If this source is not already apparent to you or your organizational context is involved, then VSM – Value-Stream Mapping is an effective methodology that can support you in identifying key sources to be prioritized.

 

Muri – Eliminating Excess

By “excess” we can understand different management phenomena such as:

• Oversized or overspecialized work equipment for the task at hand
• Resources overqualified for the task at hand
• Excessive pressure on a work schedule well beyond regular hours
• A pace (volume, speed) of production that goes beyond the specifications of existing equipment

In the first two examples, you can see a reasonably strong link to the concept of “Muda” when you look at it from another perspective, which is the underutilization of available resources. This is a waste of the “potential” of the resources available within the company in terms of its number, capacity, and expertise.

For this reason, the notion of “underutilization of skills” sometimes appears in the “Muda” box in the literature.

Our last two examples, however, have the more distinctive features of the “Muri” in terms of negative impact on value creation.

Seemingly, working harder and producing more naturally goes hand in hand with notions like “making more revenues,” “making more profits,” or “making more clients happy.” Difficult to contradict a common sense that relies on “1+1 = 2” in the Cartesian domain.

The experienced manager knows full well that it may make sense to experience temporary work overload, to deliver a large order, for example. However, a pace substantially exceeding the company’s human and equipment capacity continuously will eventually lead to disaster.

The systematic elimination of excesses is, therefore, more of an approach based on the optimum continuous quality of the goods and services produced by the business and not on the volume it generates. So the “Muri” is an approach focused fundamentally on client satisfaction and quality. A key and strategic concept of 21st-century trade.

So, there are two types of detectable excess, but very different in terms of treatment:

• Punctual excess that may be commercially justified but must be monitored very carefully as to remain “punctual.”
• Systemic excess, the one that has become entrenched in our operations and our day-to-day management to become a work standard. That’s the kind of excess we’re talking about when we talk about “Muri.”

For managers who may have difficulty identifying the “bad” excesses in their business, here is a simple thought that can be raised frequently in the daily life of a business:

“Does working overtime or implementing new state-of-the-art tools always equate to “good management,” optimal management, or do you sometimes feel that overtime could have been avoided by working differently and that the new tool was not ultimately essential to the desired productivity lever?”

Humm… If the manager in you never experienced any discomfort in approving overtime over and over again, I tip my hat to you!

Here the “Muri” is therefore closely linked with the concept of proactive management versus reactive management. Another interesting topic to explore in the future.

 

Mura – Variability in the Application of Processes

In short, if you have eliminated waste (Muda) and excess (Muri) then… all that’s left to do is work properly.

The “Mura” therefore targets the notion of consistency in applying the right ways of doing things to control and make predictable the behavior of your management machine, your business.

Here we seek to optimize the flow and quality of the company’s goods and services for the benefit of our clients and our growth.

The complexity behind a simple concept is that, regularity in the application of methodologies, and rigorous monitoring of standards, protocols, and processes are not necessarily easy things in the context of the highly unpredictable business environment in which a company operates.

All managers are in favor of virtue, but our business environment sometimes forces us to compromise management principles in which we strongly believe.

An effective strategy to work on “Mura” is to identify processes that create the highest value in the business.

By working on the regularity of one, two, or three major company processes, you will find that the intervention and improvements made to these processes can have a substantial impact on other related secondary processes.

In the medium and long term, you will be able to measure and see an overall improvement in the whole company, the operating machine, in terms of its ability to deliver what you want, when you want, at the quality level you want.

And when your business becomes predictable, there are no limits to your growth and expansion plans.

In conclusion, when you approach a potential purchase or take a step back on your computerized management platform, it becomes imperative to ensure that this management platform can track your movement and your improvement strategy towards Lean management.

The first feature to validate will be the ability of this platform to fit into your business vision and processes, as you can work on the “Muda,” the “Muri” and the “Mura” if your business and information platform doesn’t follow… you’re going to stay in the same place.

The customization of your ERP software provider’s application platform is, therefore, key to the success of your Lean approach.

Good management!