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Lean Office vs. Lean Transactional

Since the introduction of lean six sigma techniques to the western world, improvement activities have centered around operational processes. While initially these tools were intended to improve manufacturing processes and reduce inventories, management has realized these very same tools can be utilized to improve transactional or office processes. When one analyzes the order to cash process, it can be concluded that, in many cases, 80% to 90% of the total time to manufacturer and deliver a product is spent in the office. Office processes or transactional processes are all of those that support and enable the creation of products.

One of the biggest challenges is the ability to identify and eliminate the waste found in transactional processes. In many instances, this waste is hidden behind the business systems we call Enterprise Resource Planning (ERP). In order to really understand and capture these process opportunities, we need to start by understanding the relationship between the ERP systems and humans. Although many organizations struggle with managing ERP systems to provide useful information, it is we humans that sabotage the integrity of the information.

Lean office or Lean Transactional is not merely about performing 5S to the office or relocating the printer closer to one’s desk. Lean transaction is about understanding the flow of information and how it is presented to the user. This flow includes the end customer, the suppliers and the manufacturing. As we dig into the reasons for delays, errors, and wasteful steps, we begin to understand that the same tools used in manufacturing can be used to eliminate the waste in the transactional processes. For example, in manufacturing, delays can happen because tools are misplaced and cannot be found. In transactional processes, critical information may be missing from an order or may not be correct. A sales associate may spend a few hours locating what he/she needs. To locate the needed information he/she could spend time on emailing the customer, calling manufacturing, or just researching the system. By using lean tools such as cross functional mapping, spaghetti maps, SMED, visual management, 5S, One-Piece-Flow, or Cellular arrangement, we could identify where the waste is in the process and how to get rid of it.

The key to improvement, just like with anything else, is execution or implementation of ideas. In most cases, the improvement in transactional processes is about redesigning the information flow, so that the information is there when it is needed, the quantities needed and with the best possible quality. Typical benefits from lean transaction projects range form decreasing sales-order cycle time by 98% or decreasing accounting closing time by 50%, or decreasing office space by 60%. The benefits can be many times more impacting to the organization than improvements in manufacturing.

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