Commencing the Lean Journey

In the previous chapter, we laid out the methodology best suited for designing and implementing a sustainable Lean intervention in SMEs. The journey begins with a diagnostic, and in this chapter, we explain how organizations can assess their current capabilities in context of their business goals. Lean management focuses on increasing the output through effective utilization of input resources. Two essential capabilities emerge as prerequisites for organizations navigating the current competitive and unpredictable environment - flexibility and productivity. We can measure them through the broad parameters of time-to-serve and cost-to-serve. Here, we look at different ways to measure time-to-serve through direct process observation, using tools such as Value Stream Map (VSM) and we introduce the concept of effective cycle time and how it is used calculate process output capability. Under cost-to-serve, we go through typical productivity metrics for resources such as time, space, material, people, infrastructure and machines. We then summarize the assessment criteria and their suitability across various industry verticals. Lastly, we focus on target setting, the most important part of a lean roadmap. Three types of targets are discussed - growth oriented, profitability and human well-being.