Frictionless service procurement - is lean the catalyst?
It’s the new kid in town but Lean Methodology is no stranger. Manufacturing businesses have been using lean thinking for decades to streamline processes, saving time and waste. But why aren’t more service-led organisations capitalising on the benefits Lean can bring?
The origins of Lean Methodology
The concept first arose in the '90s when James Womak and Daniel Jones published their book “The Machine that Changed the World”. This was based on a new Japanese production methodology they’d witnessed at Toyota which had transformed their operations, eliminating waste and optimising human and machine capabilities. Originally called “Just-in-time production”, it focuses on creating a shorter and more efficient process for building each car. By providing materials and manpower in exactly the right quantities and at the right time, Toyota virtually eradicated waste in all its forms.
Whilst ideally suited to manufacturing, Lean Methodology can be effectively applied to any process which requires an end product to be sourced quickly, efficiently, and resourcefully. Procurement fits the bill perfectly.
Increasingly, the concept of lean thinking has been applied far more widely. Now it’s generally appreciated that Lean has a place in almost any business yet the focus of lean thinking around delivering services still isn’t as widespread as its focus on delivering products. At factories such as Boeing, Airbus, Toyota, and GE, lean principles are the foundations upon which processes are laid, alongside autonomy, which allows production lines to run smoothly and sustainably.
In the procurement world, however, the same analysis can be run. The “product” on our production line is the service we are sourcing. By mapping a lean process and flow, you can identify areas of duplication and time wastage which can be improved upon. After all, the aim is always to ensure we deliver the service to the stakeholder within the quickest timescales, within budget, with no delay and no duplication.
Procurement professionals taking an interest in whether or not their processes would benefit from Lean in some form or another often start with some exploratory questions:
- What process analysis has the procurement function done recently concerning delivering services to stakeholders?
- Are any parts of the process being duplicated, or done too soon, or too late?
- When the process breaks down, what is the route taken to getting back to full productivity?
- Does productivity regularly halt because of specific issues?
Lean practitioners adopt various techniques to first interrogate the efficiency of a system and to arrive at the most efficient operating model.
Process Mapping helps paint a picture of the stages and steps taken from inception to delivery. This could be as simple as post-it notes on the boardroom wall or harnessing full flowchart software but the important thing is to visualise each step of the process so all parts can be interrogated.
Time Mapping happens once the current process is laid out. It's overlaid over the process map with the actual time it takes to complete each stage, and then accompanied by the desirable time you'd like it to take. This starts to highlight areas where waste (think time) can start to be tackled.
Touchpoint Mapping takes process mapping and identifies what points different parties touch the process and how long these touchpoints last (or ideally should last). This concerns interaction with suppliers, customers, finance, and other internal teams.
Value Stream Mapping plays an important role in identifying points in the process that add specific value. Who benefits from this value-add: the business, or the customer? Does it add to the overall value provided to the end recipient? If nobody in the team can identify any value the step or process offers, it's a chance to consider removing or changing it to something which does.
Automation is a consideration that is key to enabling teams to start the process of cutting the identified waste and being able to streamline the steps. With the aforementioned practices already undertaken, the process of targetting steps that cause the most friction should be easier to identify. The implementation of automation in these target areas could free-up valuable personnel time which may be better utilised elsewhere.
It might seem like a big undertaking - and yes, when looking at making every part of the process lean, we may be talking a year or two here depending on the size of the organisation, but it doesn’t have to be tackled all at once. Each little move towards monitoring efficiency and adding value is worthwhile - small incremental improvements cumulatively drive a big impact.
Lean thinking value add
Economically, in the UK, we’re in uncertain times - and we’re not the only ones. In a precarious environment, securing your supply chain, making efficiency improvements, and limiting risk are all valuable tasks. Lean thinking lends procurement teams a focus on the process which inevitably leads to cost and time savings. It’s also a spotlight on what’s most important about procuring services - adding value for your client and freeing staff up to do their jobs well.
Lean goes hand in hand with other aspects of procurement housekeeping like spend analysis and refreshing the supply chain in that they are a series of small parts that aid in improving the health of the procurement process conveyor belt. If anything, it’s likely to lend you greater resilience for weathering any further storms ahead. After all, when thinking of the business as an efficient machine, it’s always good practice to ensure the engine is ticking over nicely…