Lean is often a term that seems to be thrown around in error, often used interchangeably with “Six Sigma” but the 2 are different.
Lean is a series of tools, techniques and thinking that will focus on cutting waste, increase customer satisfaction and ultimately increased profit.
Sounds good, right?
Lean is also proven to work and deliver results. Several large multi-national companies, such as Toyota, General Electric (GE) and Motorola can point much of their success to this approach.
Benefits of Using Lean
Lean is a way of thinking to minimise waste and inefficiencies, in turn leading to customer satisfaction and improved profits.
Successfully applying the principles leads to reducing the resources used and gives you less errors.
“Lean manufacturing uses less of everything compared with mass production – half the human effort in the factory, half the manufacturing floor space, half the investment in tools, half the engineering hours to develop a new product in half the time. Also it requires keeping far less than half the needed inventory on site and results in fewer defects.”
(Womack, et al., 1990. p. 256) – https://www.pmi.org/learning/library/lean-project-management-7364
What is the Origin of Lean Thinking?
Lean originated in the manufacturing environment. Toyota is often attributed as the originator by developing it in the period after World War II through to 1970’s.
I think that it started a lot earlier than that – really with the dawn of the Industrial Revolution – it just didn’t have a fancy “Management Consultancy” name at that time! Lean thinking principles can be seen in the advent of mass production, including minimising downtime, reducing waste, maximising throughput and profit.
The Ford Model T was a huge innovation for consumer travel from 1908. Ford’s production line approach was a large driver of this (no pun intended there). Toyota looked to drive efficiencies in the 1940s to 70s and were famously connected with Lean manufacturing. This included elements like “Kanban”, “Just In Time” (also known as JIT) and “Kaizen” (Continuous Improvement).
So, the Lean methodology has been around for a while and is tried and tested.
How to use Lean in Retail Project Management
Given it has origins in manufacturing efficiency, using Lean in retail operational improvement can be a great way to identify and pursue cost savings. In my opinion, one of the biggest advantages for Lean is that it is simple to apply.
The key Lean principles can be very easily translated to project management, particularly for Retail Project Managers.
1. Customer Value Add
One of the principles of lean is to focus on how the customer sees value. In the book “Lean Thinking” by James Womack and Daniel Jones, they suggest that what one customer sees as valuable is not necessarily be valuable for another person.
“The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer”
(From Lean Thinking, 2003)
You have to start by defining the customers for your project (hint – they may or may not actually be carrying shopping bags or a pushing a trolley!). Once you define your customer, what is valuable to them?
James Womack and Daniel Jones continue with:
“Value is created by the producer. From the customer’s standpoint, this is why producers exist”
(From Lean Thinking, 2003)
Now put this into perspective for managing a lean retail project:
Value is created by the Project. From the customer’s standpoint, this is why the Project exists.
Next Step For Thinking Lean In Retail – Determine who your customer is and exactly what it is that you do that they perceive as ‘value add’?
2. Process Flows
Documenting new processes as well as capturing existing processes gives great visibility for your business. They provide great clarity and can help communicate to your stakeholders. They can tell someone else:
- What’s happening (or what is meant to happen)
- Where is a process breaking
- How will a process change
Once you understand the process, you can start to see where the real customer value is added .
Next Step For Defining Retail Processes – What processes does your project change, eliminate or create? Which stages add value for your customer? How do they change and are you documenting them?
3. Cut Waste
By understanding your customers, what they value and how your processes deliver this value, you can then focus on removing wasteful or damaging elements. You will want to:
- Stop defects and repeating work
- Cut excessive movement and travel
- Reduce wasted time
Lean thinking introduces 7 types of waste which you can remember through the acronym TIMWOOD:
- T – Transport
- I – Inventory
- M – Motion
- W – Waiting
- O – Over-Processing
- O – Overproduction
- D – Defects
You can apply the thinking behind this acronym to cut waste to design lean retail processes or make your existing processes more efficient.
Next Step For Cutting Waste In Retail – You should review your processes to find when, where and how waste exists in your processes. You should identify the waste by using the these 7 wastes as “mind triggers”. What is it that you need to do to cut out this waste?
4. Continuous Improvement
One of the successes of the Toyota system was to always strive to be better. True lean thinking is not a one off activity.
You should introduce a way of building in continuous improvement to your lean approach. How will you continue to deliver more value for your customers? What will you do to ensure you are adding real value? How will you continue to cut waste?
By continually asking these questions of your store, distribution or head office operation, you’ll be developing a culture of thinking lean in retail. This will naturally lead to efficient and effective processes which will cut costs, improve customer service and experience as well as generally making the operation run with fewer problems.
Next Step For Ongoing Operational Improvement – What will you do differently to ensure that you continue to develop lean thinking yourself?
How Should You Start Your Lean Journey in Retail?
As you are starting to understand, Lean is a series of tools, techniques and principles which, unlike Six Sigma, isn’t deep rooted in complex statistical analysis. This means you can pick up each tool relatively by itself and you can use it at any moment in time through your project.
You can use many of the techniques in the Lean toolkit both a macro and micro level in retail. Perhaps it is applying “5S” principles in a single store to tidy a stock room. Or maybe it’s using a tool such as a “fishbone diagram” (or it’s official name, an Ishikawa diagram) to assess the root cause of a business wide issue across several potential faults.
The most common form of getting into Lean thinking is through Lean Six Sigma. This project management methodology combines the approaches developed by Toyota and others and combines it with statistical Six Sigma techniques.
When you are using the techniques from Lean Six Sigma in Retail, you will find that some tools aren’t often applicable or don’t feel natural when looking at retail projects – but then there are some which are a great fit. The trick you’ll need to figure out is which will be most useful to you.
But, if you can’t tell, I’m a big fan of Lean in retail.
I think Lean in retail a great way for retailers to be thinking and progressing how they run projects. So, as I was building the Project Manager Success flagship course to develop successful Retail Project managers, I was sure to include several of the Lean principles and tools at several different points.
I believe if you take the right elements from Lean thinking, then you could really revolutionise your retail operation. You’ll find new project opportunities and highlight areas where your processes aren’t serving your customers in the optimum way. If you’d like to know more about the retail project management online course, then don’t hesitate to find out more by clicking the link.
Do you already use Lean in retail? Or is it completely new to you? We’re looking forward to hear from you in the comments!
About the Author
Oliver Banks is an expert project and programme manager. He first started learning about the Lean Six Sigma tools and techniques whilst at Xerox in 2004 before later gaining his Green Belt and then Black Belt. Oliver has run projects focused on driving efficiency in specific parts of an operation as well as designing lean operating models.
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