Interested in learning how Lean and Six Sigma concepts can be applied to help nonprofits and government agencies improve what they do?
Here are the 5 lean principles, which we have tried to summarize into an easy to understand format. Please contact us if you have any questions.
- Value: Start with the customer. They are the ones who define what product or service you offer is valuable to them. Once we know what is valuable, we can work on eliminating or reducing the activities that are non-value added.
- Value Stream: Understand and map the entire process, from the very beginning of your process all the way to when your customer uses your products and services. This is the value stream. This map will help you see how long it takes from the time your customer requests your product or service, and when you deliver it. What you will find out is that most of the total time is waiting and delays. The percentage of the time where people were actually working on the product or service is often a small percentage of that time. These delays and waits are opportunities to streamline the process. The goal is to optimize the whole system, not individual processes or tasks that can actually make the overall system inefficient. Your customer only experiences the overall value stream, and they don’t care how efficient each individual process operates.
- Flow: Once you can remove the waiting and delays, you can shorten the time from request to delivery of your product or service. We accomplish this through the elimination of the 8 forms of waste, or TIM WOODS.
- Transportation – Moving parts, products and people unnecessary. Moving does not add value, and takes time and resources to complete.
- Inventory – Having more than the minimum amount of work needed to pull the work through the system. Inventory is not ideal because it is waiting to be worked on, you have already spent money or effort but it’s not needed yet, and it can become outdated or have to be updated. When it is physical inventory, it can take up floor space and may require packaging, transportation and someone to manage it. These all lead to excessive costs.
- Motion – Movements that are straining or unnecessary, such as looking for items, having commonly used items further away from you
- Waiting – When your customer, or the next process is waiting for information, parts, or help to arrive.
- Overproduction – Working on a task before it’s actually needed by the next process or customer.
- Overprocessing – Performing unnecessary, redundant or incorrect tasks
- Defects – Errors, mistakes, and variation, that will require rework and could lead to extra time and costs to fix the issue.
- Skills – Putting people into roles in which they are overqualified, or not aligned with their passions and skills. Often times, organizations do not fully utilize the brains of their employees and volunteers, they only use their hands.
You may need to separate out certain products and services into their own value stream, as the type of work may vary significantly. Move towards a one piece flow mindset, where only one product or service is being worked on at a time (not batching or putting multiple items through the process at once). You may also need to increase inventory in certain areas, in order to keep things moving. Although inventory is a form of waste, having the right inventory in the right areas is a good short term plan to get to flow. Later on, we will work to eliminate the inventory. In many organizations today, there is inventory, but it’s not planned, it just shows up where there are constraints and bottlenecks in the process. One thing to keep in mind: The goal is to move the product or service through the process, not make people productive. Therefore, you will have times where people are waiting and non-productive.
- Pull: Once you have consistent flow in the process, then you have a good idea how long the process actually takes (when the waiting and delays are reduced). Instead of pushing the work through the process, we now transition to a pull system, where each step in the process only pulls the work when it is ready. This prevents inventory from stacking up in the process, especially when there are problems. To control the work, you will need ways to limit the workload, and signal when the next step is ready for the work. If you can’t complete the task soon enough (before the next step runs out of work), you may need to have some inventory in place to reduce delays.
- Perfection: Lean tools and concepts are setup to make problems visible. If your organization is not open to dealing with and talking about problems, then you will struggle with this approach. As the lean system exposes problems every day, and your organization works to solve these problems, you will continually improve. Over time, your organization will be striving towards perfection (which cannot ever be achieved), but you will be increasing value and shortening response times with your customers, which will make your organization more successful and sustainable. The 5 lean principles model is a circle. Values can change over time, so we need to always go back to step 1 (value), to see if the customer still feels we are providing the right value, or if we need to transition to something different.
Toyota consultants help lean out the process of distributing food to those in need in New York City.
To watch more videos about Lean applied to nonprofits, check out the Toyota Production System Support Center (TSSC) website >>>
- 2/29/16 – Challenge for Indian Industry – Most charities do help people, but do not provide them the skill to take care of themselves. Food for the Poor, as example, is wonderful feeding people but does not help make those people become self-reliant – so they will always need the charity. All charities including SST should at some time disappear as the problem disappears. – Norman Bodek
- 1/5/16 – WNY nonprofits reduce waste by learning the Lean way – Community Services for the Developmentally Disabled (CSDD) in Buffalo and People Inc. in Williamsville (NY) are taking a fresh look at service delivery through a different lens: the Lean methodology of decreasing waste.
- 5/29/15 – Connecting Lean Thinkers With Nonprofits in Portland, Oregon – Learn how Lean Portland got it’s start with a project with Friends of the Children – Matt Horvat
- 3/26/15 – Lean Thinking in Refugee Projects – In the Shatila camp south of Beirut, a self-help program is making a difference in the lives of Palestinian refugees, engaging them in rehabilitating their shelters.
- 1/13/15 – Two Years in Tanzania and a Whole New Understanding of Purpose – CCBRT has transformed lives through disability and maternal healthcare services, with help from a sole lean coach with the responsibility of initiating a lean transformation. Listen to the podcast. Andrew Parris
- 6/12/14 – Using Lean to Help NGOs with Steve Bell – A podcast episode with Steve Bell, a longtime lean thinker from Portland. While his background is in the IT and Agile spaces, Steve’s passion is using lean to help NGOs and nonprofits.
- 5/2/14 – Bringing Respect for People to the World’s Sweatshops – Why Nike is trying to apply Lean concepts with their supply chain
- 2/28/13 – Vietnam nonprofit aims to bring the entire country through a Kaizen transformation – Agile Vietnam, a self-organized nonprofit dedicated to the promotion of economic development in the country, believes a Kaizen transformation will be a necessity to establishing the country as a global player. Using Japan as a model for what can be accomplished, Agile Vietnam asserts that Lean manufacturing practices can help businesses bring greater value to customers while reducing overall costs.
- Introducing Lean for Nonprofits
OTHER RELATED ORGANIZATIONS
- Lean Portland LinkedIn Group Page
- Lean4NGO website
- Lean Impact – Organization dedicated to applying lean principles for nonprofits and social enterprises
- Lean Thinking for NGO’s and Nonprofits LinkedIn Page
- Toyota Production System Support Center (TSSC)
ORGANIZATIONS IN OTHER CITIES