Lean Enterprise: Not Just for Manufacturing

It’s not another "flavor of the month" or one more program that senior management tries in the quest for greater efficiency. Instead, lean enterprise offers significant company and customer benefits over traditional business methods.

Lean enterprise principles can be applied to any type of business—not just manufacturing. The service industry, healthcare, and even administrative areas within organizations can greatly benefit.

The Center for Excellence in Lean Enterprise (CELE) at Rochester Institute of Technology works with companies throughout the region to assist them in making the switch to lean enterprise.

One of their current clients is Goulds Pumps, ITT Industries in Seneca Falls. Under CELE guidance, Goulds teams took lean tools and not only applied them to manufacturing, but creatively applied them to the administrative process, says Craig Fulton, senior program manager at CELE. This resulted in a 26 to 54 percent reduction in the total time it takes to hire a new employee (depending on whether it was an internal or external hire).

The lean enterprise training and kaizen events—short bursts of targeted activity focused toward solving problems and eliminating waste—at Goulds Pumps also resulted in significant improvements in other areas of their human resources process, including developing standard procedures and documents for use by all departments in the hiring process. The number of Goulds employees needed to authorize a new hire was reduced more than 24 percent.

The human resources office work environment was also improved, with an added waiting area, space for new cubicles and an increase in storage capacity.

"Essentially what we’re seeing throughout our organization is that employees are embracing the concept and want their areas to be involved in kaizen events," says Ron Golumbeck, vice president of human resources at Goulds Pumps.

Employees are recognizing the benefits to their own jobs and job security, instead of being worried about possible negative impact on their jobs, he says.

Indeed, lean enterprise is becoming a company-wide approach to doing business at Goulds Industrial Pump Group and their parent company, ITT Industries. ITT Industries plan to use Goulds’ administrative application of lean principles as a model for the rest of the company.

"The RIT CIMS team has played a key role in taking our company to the next step in our lean journey. Their dedication, expertise and zeal for lean thinking has touched many people throughout our organization," says Golumbeck.

Lean thinking is a continuous improvement process in which every procedure in a business adds value with a minimum of waste. "It’s a philosophy of how you’re going to run your business," says Marc Haugen, director of CELE, a unit of RIT’s Center for Integrated Manufacturing Studies. "It’s very customer driven and very cost oriented, with little or no infusion of capital required."

Traditional enterprises often look at a process and then try to optimize that process. The result can be unbalanced, where one process in the middle of a series of processes outruns the total capability of the others. Lean enterprises look at the whole and create a so-called "value stream." The value stream is the set of all the actions required to take a product from concept to customer delivery. By working to optimize the entire value stream, lean enterprises seek a more effective balance.

"In lean enterprises, there’s a big concentration on value-added versus non-value-added activities," says Haugen. "Value-added activities are those things for which a customer would be willing to pay. Non-value-added activities, which are part of a company’s operation, are those things for which a customer, if given a choice, would not be willing to pay. Lean enterprises first identify and separate the value-added from the non-value-added, then they reduce or eliminate the non-value-added activities."

While lean enterprise does require a level of commitment from upper management, it doesn’t necessarily take a lot of money. "We are not talking about a commitment in terms of dollars and cents, but rather of people’s time to root out sources of waste," he says. A significant advantage of adopting lean principles as an operating philosophy is in its immediate payback.

A company’s potential to derive benefits from lean thinking is not limited by the size of the company, its physical location or by type of product.

"Business ‘drivers,’ such as waste reduction, are things that management must look at every day," Haugen says. "It’s not a program or a flavor or even a manufacturing program. It applies to any business process."

The Center for Excellence in Lean Enterprise is offering a five-part series of daylong lean enterprise seminars, leading to a certificate of completion. The series is designed to provide a solid foundation in the essential tools for a successful journey to "Lean."

The seminars will be held in the RIT CIMS building on Feb. 22—Lean Overview, Takt; March 22—Value Stream Mapping, 5S and Visual Controls; April 19—Standard Work, Line Design, Kanban; May 24—Kaizen, Setup Reduction, Mistake Proofing; and June 21-—TPM, Impact and Culture, Other Tools.

The cost for each seminar is $395, with a $150 discount with registration for all five seminars.

Want to get "Lean"? Some definitions you should know

Takt – rate at which customers require finished units or services
Flow – linking all value added steps without pauses
Pull – producing a good only when the customer asks for it
Kanban – signal card, which initiates work
Kaizen – continuous incremental improvement
Value Added – something the customer is willing to pay for

The principles of lean enterprise are based on concepts originally developed by Toyota, although lean manufacturing can be traced back to Henry Ford whose company mined iron ore on a Monday that left the assembly line as part of a car on Thursday. Today, industry leaders in fields including healthcare, construction, service, as well as manufacturing are using these concepts to increase profitability and customer satisfaction by minimizing waste. Rochester Institute of Technology’s Center for Excellence in Lean Enterprise offers comprehensive lean enterprise services including assessments, project implementation, training and education. 

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RIT’s Center for Excellence in Lean Enterprise (CELE) is dedicated to helping manufacturing and service businesses apply proactive lean enterprise principles. CELE is a business unit of the Center for Integrated Manufacturing Studies, a world-class organization with a mission to increase the competitiveness of U.S. manufacturers through applied technology and training.

Established in 1992, the Center for Integrated Manufacturing Studies (CIMS) provides technology and workforce development solutions that strengthen industrial clients’ ability to compete in the global marketplace. CIMS business units include the National Center for Remanufacturing and Resource Recovery, the Printing Applications Laboratory, the Center for Excellence in Lean Enterprise, and Corporate Education and Training. CIMS represents a dynamic collaboration of in-house technical experts, as well as academic, industry and government resources.