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Order entry, quoting, scheduling, design and engineering, purchasing, accounting—these and other front office functions can provide an eye-opening opportunity to create improvement, eliminate waste, and increase profits in your business. Often, however, businesses implementing lean manufacturing bypass the front office and target their manufacturing processes. After all, front offices have paperwork, not inventory, right?
The greatest opportunities for improvement are often in the non-manufacturing, front office areas. Ineffective front office processes also make it more difficult for manufacturing operations to do the best, most cost-effective work. A lean enterprise must be lean in every area, including the office areas.
Office wastes can be defined in the same lean terms as we apply on the shop floor. These wastes can include:
· long lead times (waiting wastes);
· inventory (queued-up work in your in-basket);
· over-processing (excess paperwork, redundant approvals);
· motion (inefficient work area design and layout);
· defects/mistakes (incomplete/ inaccurate information);
· transportation and motion (complex tracking systems).
If you’ve never thought of the front end of your business—your office—as being a prime area for improvement in lead times, cost, and quality, it’s time to take a look. It’s not uncommon to discover that over 95% of the lead time in your order is found in the office functions – and only 5% of the lead time in the actual production of the product.
Lean tools identify waste
Value Stream Mapping (VSM) is a valuable lean tool for eliminating waste in the front office. VSM is a system focused, or big-picture, tool designed to identify every step in an order’s path across an entire system (or through the company) from the moment an order is taken to when the final product is shipped.
Mapping is the key to identifying potential improvement
Lean for non-manufacturing processes begins with training in VSM and the basics of lean manufacturing. A first step is the choice of a cross-functional team with members that represent all areas to be mapped.
The team creates a current state map by following an order’s path from customer (quoting and order entry) all the way to delivery (shipping). The current state map is created by capturing, with pencil on paper, the existing flow of both material and information within your system. This visual map provides you with a real picture of the system that your organization uses to deliver products and services to your customers. It helps you to analyze actual sources of waste within your processes so you can target your improvement efforts.
This current state map tends to be an eye opener for the team. They might know it takes on average three weeks to get an order out the door, for example, but they don’t realize it’s only maybe four days through the manufacturing area, and everything else is pre-manufacturing.
Next, a future state map is developed. The team then identifies ways to improve the process flow that will eliminate waste and utilize time, talent and equipment more efficiently. This invariably results in a better understanding of the entire manufacturing process. These improvements define the "future state map" – where you want to be in one month or a year from now.
Potential opportunities for improvement include:
· eliminating redundant approvals;
· improving the flow of paperwork;
· restructuring how orders are handled; and/or
· labeling and rearranging a storage area to avoid ordering redundant supplies
Tactics for implementation success
The best strategy for implementing improvements is to start with a small project, record the progress the team made, share the success, and then move on — and always maintain momentum. Communicating the team’s progress and successes is very important, as is alerting people who will be affected by the changes.
Accurate estimating, efficient order handling, and responsive customer service protect your profit margins, maintain your reputation, and keep you competitive. Manufacturers are finding that lean front office improvements that cut days or weeks from a schedule have a significant impact on a company’s ability to succeed in today’s competitive environment.
To learn more about how value stream mapping might benefit your administrative processes, contact your IMEC Client Manager.
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