5 trends reshaping the Lean landscape

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Lean is at an interesting crossroads in its storied history. There are at least two dimensions to this juncture. On one hand, some industries feel they have already implemented Lean and are looking for ‘the next new thing’. On the other hand, other industries such as healthcare are experiencing the joy of lean experimentation and the rewards of improvement results for the first time.

For the first dimension, caution should be exercised. In my experience, even organizations who have been attempting to improve their performance using lean concepts and techniques for many years are only part way in their journey.

Lean has many aspects and layers, many of which remain unexplored by organizations or have not been properly executed. In these cases, instead of looking for the next new management tool, organizations may want to assess their implementation status and see where there areas to strengthen within the existing lean framework. There are still an amazing amount of opportunities that have yet to be realized.

Let us examine the current status of lean, in terms of trends that we can see in today’s business environment. The following are key trends that I have been observing:

Trend #1: Lean touches every industry

Lean methodologies are increasingly being used across nearly every industry imaginable. In Singapore, for example, at lean-related conferences one can find speakers and participants from all areas of the private and public spectrum, including healthcare, banking, retail, IT and government, as well as the traditional areas of manufacturing and supply chain. Although there remains a stigma that lean is only for manufacturing, this notion is increasingly disappearing.

Trend #2: Increasingly part of ‘Transformation’ initiatives

With rapidly evolving technology, shifting business models and intense global competition, many organizations are realizing the need for significant and broad-based change. This deep degree of organizational change is being referred to more and more as ‘transformation’, with key executive roles of Transformational Leaders being designated.

The notion of transformation varies from company to company, but ideally it is a convergence of lean, strategy, program management and change management, as part of an overall Organizational Development initiative.

Lean can play an important element, if not the leading element, in many of these large-scale transformational endeavors, as evidenced by a Global Transformation VP role I was recently asked to consider – based on my lean background - from a huge Amsterdam-based global lighting company.

Trend #3: Integration of Lean and Six Sigma

Initially, Lean and Six Sigma were often administered and executed by separate departments in organizations. In recent years, the two activities have been merging into one ‘functional’ unit, sometimes called the Lean Six Sigma department, yet often the two activities are still deployed by separate sub-teams who are experts in the respective methodologies.

The trend is true integration, where the synergies between the two approaches are fully leveraged and people highly skilled in both methodologies are utilized, though there may still remain ‘master’-level expertise residing within separate individuals. GE is an example of a company that was very well known for Six Sigma but has actually put a significant emphasis on the implementation of Lean.

Trend #4: "Value Stream Thinking" as a way to manage and improve processes end to end

Recognition of the Value Stream and the use of Value Stream Mapping (VSM) is increasing. However, the proper application of VSMs remains elusive in many cases.

During a recent trip to a very well-established Financial Management company, for instance, my hosts were excited to show me their ‘VSMs’, which were really just headings of major business activities, with detailed process flow charts below each heading. In other cases, VSMs are actually nothing more than glorified process mapping. With no method to measure the end-to end performance of the process, these cannot be considered VSMs.

A big opportunity for the future lies in the application of Value Stream Management, which is a way to manage and improve the end-to-end value stream on an ongoing basis. To date, there are still precious few examples of solid Value Stream Management in place, though the trend is increasing and companies realize that deep silos and lack of cross-functional flow are having a negative effect on customer experience, innovation, teamwork and cost.

Trend #5: Lean being increasingly seen as a management system

Although Lean was initially regarded as a set of improvement tools, it is increasingly seen as a comprehensive management system. Lean Leadership is the management system technique that is required to power the lean improvements and sustain gains, as well as a related set of leadership competencies that go above and beyond the ‘normal’ suite of leadership skills. Gemba Management is an example of a specific behavioral pattern that we expect a Lean Leader to exhibit in their daily work. While we have seen progress in this area, more needs to be done to formalize these special skill expectations into HR’s Leadership models and training programs.

What do you think? Do you agree with these? What other trends have you observed?