Lean Office provides significant benefits to the organization that adopts it. Lean Office organizations provide greater customer value with higher quality at less cost. Lean Office organizations generate better returns on their investments in labor and capital. These benefits positively impact the organization's top and bottom lines.

Each of the above are internal benefits to the organization. There are external benefits to their customers as well. From a customer point of view a Lean Office organization provides them the product or service they need, customized to their specific requirements, with the quality they expect, in a highly responsive manner. This is an equation for happy customers; and happy customers buy more, tell other customers of their experience, and become engaged in ensuring the organizations future success.

Lean Office provides the means to better manage and measure the return on labor investment. Value stream maps create management visibility into the invisible processes of the office environment. They provide management greater insights on how work actually flows through the organization, where potential bottlenecks exist that rob performance, and where labor investments can generate the largest returns.

The quest to maximize value added work and reduce or eliminate non-value added work also brings into clear focus how labor is allocated to both. The direct impact of reducing non-value added work is an increased return on labor investment.

In addition, an indirect impact of Lean Office on labor investment results from the Increased Satisfaction of employees. Happy motivated employees perform better than those that aren't.

Traditional operational improvement approaches (such as business process reengineering) do not take a system-wide view of how all of the organization's assets are allocated towards producing customer value. Lean Office considers all five drivers of operational performance; the five M's as defined in the Lean Office Glossary.

• Men & women
• Machines
• Methods
• Materials
• Measures

Lean Office techniques help to align each of the five M's to maximize customer value creation. The unrelenting hunt for waste in each of the five M's helps insure those assets are effectively and efficiently utilized.

Reduced cost of non-quality:

The Lean Office Glossary defines the cost of non-quality as the financial impact due to the production of waste by the organization. When most organizations measure the cost of non-quality they only measure the financial loss due to the production of errors, rework, or scrap. Each of these is a defect, which is only one of the seven wastes. There are six other wastes that are included in a Lean Office hunt for non-value added waste.

Every waste discovered consumes resources of the organization. In addition to the waste itself, exception processing can represent a significant drain on the organization. Reducing or eliminating waste frees up the labor and capital used to create the waste and to later fix it; enabling these resources to be used in other value added activities and reducing the cost of non-quality.

Top

Improved revenue and profits:

The breakthrough thinking associated with Lean Office is its unrelenting focus on maximizing the creation of customer value. This becomes the responsibility of every employee in the organization. Rather than just looking at top and bottom-line performance, every set of eyes in the company is looking for the smallest amount of waste in every activity performed in every value stream of the company.

The results are dramatic improvements in the amount of customer value produced by the organization. Even small reductions in waste start to make significant contributions when multiplied by thousands of activities. Increased customer value ultimately increases top-line revenue. Customers are willing to pay for value. Since the increased revenue is produced with higher productivity and less labor and capital expense, profits also increase. Increasing both revenues and profits is a combination to benefit any organization.

Reduced cycle time:

Cycle time is defined in the Lean Office Glossary as the wall clock time necessary to complete one item of value. In the example of a sales order let's assume that an organization receives 100 orders per day. We can determine the cycle time of the value stream that flows from the receipt of the order until the order is released to fulfillment. For our example, let's assume that the average cycle time for each sales order is 48 hours. Some orders will take more and some less.

Now let's assume the work time for each order averages 1 hour. Work time is defined in the Lean Office Glossary as the wall clock time spent performing direct value added activities within a value stream. The 1 hour work time for a sales order includes the time spent by various people for data entry, customer contact, quality assurance, etc., that was performed with regards to processing the order.

In Lean Office, the time difference between the cycle time and the work time is waste. In our example, there are an average of 47 hours of waste for each sales order processed. Lean Office reduces the cycle time of any value stream. In the sales order example a typical result would be to reduce the cycle time from 48 to 2 hours or less.

Reduced work time:

Work time is defined in the Lean Office Glossary as the wall clock time spent performing direct value added activities within a value stream. Some of the work time associated with a value stream can be associated with non-value added work and the rest with value added work. Lean Office strives to maximize the value added work and reduce the non-value added work. Reducing the non-value added work reduces the total work time, and therefore the cost, to execute the value stream.

Increased quality:

In many environments the primary measure of quality is defects; the number of errors produced. The Lean Office Glossary expands the definition of quality to maximizing customer value added activities while minimizing non-value added activities. A defect is just one of the seven categories of non-value added activities or waste. The root cause of most defects is one or more of the six other forms of waste. Removing or eliminating these wastes increases overall product or service quality.

Another Lean Office concept that contributes to increased quality is "stop-the-line." Stop-the-line allows anyone to stop processing when a defect is found and investigate its root cause. This creates a tight feedback loop between contributors to a value stream.

Immediately stopping the line:

• Prevents defects from being propagated downstream through the value stream.
• Provides immediate feedback to individuals introducing defects - the strongest method for inducing individual change
• Facilitates continuous quality improvement

Increased throughput:

Throughput is defined by the Lean Office Glossary as the velocity of work performed by a value stream. For example the number of sales orders processed per day or the number of press releases posted per month. The goal of increased throughput can either be 1) increase the value produced per unit of time for the same organizational cost, or 2) maintain the same level of throughput at a reduced cost to the organization.

Lean Office helps to increase throughput by tightly stringing together the value added activity of a value stream in a continuous flow model. As soon as one value added activity of a value stream is completed the next is started with little or no waiting. Eliminating or reducing non-value added activities allows the freed up time and resources to be spent on value added activities. Quality is increased, reducing the number of defects, further increasing the average throughput.

Strategic & tactical alignment:

Lean Office is all about maximizing customer value. With Lean Office, the culture of the organization changes so that everyone knows exactly the customer value being created and their role in its creation. The Lean Office culture establishes a firm foundation for then tying the strategic direction of the organization with the tactical day-to-day value creation.

Lean Office includes a technique known as policy deployment. The Lean Office Glossary defines policy deployment as a top down planning process that ties strategic direction to the vital few tactical initiatives for realizing the desired business outcomes. Policy deployment is an iterative process that starts with analysis of the organization and its market, the formation of an initial strategy, the review of that strategy against existing value streams, and then the feedback to start the next iteration. This consensus building iterative process is sometimes called catch-ball.

When completed, policy deployment establishes clear links between strategy and its impact on the value streams of the organization. Since everyone in the organization knows how they contribute to the value streams, they understand how they are impacting strategy. This allows the organization to react as a single interdependent system in strategic and tactical alignment.

Increased agility:

The agile organization is defined in the Lean Office Glossary as the ability to be nimble and turn quickly in reaction to market changes. Agile organizations satisfy their customers early and often. Lean Office helps organizations become more agile by first giving them more visibility and control of their customer value producing value streams. What you can't see you can't manage. Lean Office value stream mapping and visual controls provide tools for managing agility.

Quicker time to market:

Lean Production techniques were first applied by Toyota on factory shop floors where there was consistency to the number and types of products being produced. But soon Toyota began to apply Lean concepts to their engineering organizations as well. Still today, Toyota can engineer a new car in almost half the time of an American automobile manufacturer.

Lean Office is an approach that works just as well with the repetitive nature of sales order processing and customer service as it does to product marketing and development. The system-wide view of Lean Office Value Streams provides the working focus for interdisciplinary working teams; to both align their efforts and to streamline their results. Lean Office ties customer value streams directly to strategic direction and become a vehicle for communicating to all employees the customer value priorities. The value streams become the means to help maximize customer value creation and eliminate non-value added waste. And through the use of continuous flow, the value streams accelerate the time it takes to define, build, and launch a new product or service.

Greater market segmentation:

Henry Ford is attributed with starting the era of mass production in the early 1900s. Mass production enabled the mass market to by an automobile as long as they wanted it black. Taiichi Ohno of Toyota is attributed with starting the era of Lean Production in the 1950s. Lean can be described as mass customization. Lean retains the ability (if necessary) to maintain high throughput, but also allows high customization of the product or service.

Lean Office techniques allow organizations to design value streams supporting high or low throughput that can produce customized products or services for markets of one. This is due to low cycle times, low amounts of work-in-process, cross functional team members, and a balanced flow structure that builds in flexibility. The system is designed for change; change is expected, so when it occurs it does not create the same people change management issues as a "mass production" environment.

As a result, organizations are able to establish value streams that provide individual customer treatment, and better leverage existing expertise in new markets.

Sustained competitive advantage:

The continuous performance improvement of Lean Office allows organizations to increase their productivity at an system-wide average of 3-8% per year, compounded year-after-year. Because organizations are complex systems, attempting to increase productivity at a quicker rate dramatically increases the risk of failure. In fact because of the higher failure rate, organizations attempting to do so will probably perform at the lower end of the improvement average.

Organizations that fail to adopt a Lean Office approach to continuous performance improvement will likely see their productivity remain flat or perhaps decrease.

Productivity improvements compound on each of the previous years improvements due to the complex systems nature of the organization. Making an improvement change or removing a waste in one area sets the stage for being able to leveraging that change for additional improvements in another area. Toyota has been compounding productivity increases with Lean in their organization for 50 years now and they figure they have at least another 50 to go before the curve flattens out.

Toyota has a sustained competitive advantage over other automobile manufacturers because they are higher up the productivity improvement curve than their competitors. A 5% productivity increase at Toyota produces more value than a 5% increase at Ford. Because of this Ford, and because greater increases are not sustainable, Ford will never catch Toyota's productivity level.

An organization that starts a Lean Office initiative today will achieve the same sustained competitive advantage over their competitors that wait that Toyota has over Ford. An organization that allowed a competitor to start a Lean Office initiative first had better start theirs as soon as possible, because every day they wait increases the gap between they are their competitor that they may never be able to overcome.