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CHAPTER ONE INTRODUCTION
A. Introduction
1.1 This report presents the research that was undertaken by Warwick Business School commissioned by the Scottish Executive in order to evaluate the Lean approach to business management and its use in the public sector. The research project commenced in August 2005 and was completed in March 2006.
1.2 Broadly the project aimed to evaluate the application of Lean in the public sector in order to consider if it is an appropriate means to enhance the future embedding of a continuous improvement culture.
1.3 More specifically, the evaluation hoped to achieve the following objectives:
- To develop a clear understanding of the philosophy, relevance and components of Lean related to the public sector.
- To indicate if particular tools, techniques and components of Lean are more appropriate for public sector use across different services.
- To give an assessment of the level of improved productivity and quality that can be expected through the introduction of Lean
- To give recommendations and suggestions about how to establish and implement Lean across Scotland's Public Services.
- To give an understanding of the organisational implementation issues of such a major change programme
1.4 By meeting the aim and objectives it is then possible to answer the following questions:
- Can Lean work in the public sector?
- How can Lean work?
- Can Lean be replicated?
- Can Lean embed a culture of continuous improvement?
1.5 The research consisted of a literature review, case studies of public sector organisations in Scotland who believed they were implementing aspects of 'Lean', a survey and an evaluation of pilots of a Lean methodology which had been developed by the Scottish Executive (see 2.18-2.22).
1.6 The focus of this report is to present the findings from the case studies and pilot studies, drawing on some evidence from the literature review (Annex 1) and survey (Annex 2) where relevant.
1.7 The report is divided into eight chapters.
- Chapter 1, Introduction, introduces the research aims and objectives. It also outlines the concept of Lean, focussing particularly on its relevance to the public sector.
- Chapter 2, The Research, sets out the data and information sources and methods of data collection and analysis employed. It presents some detail on the case studies and pilot sites who took part in the research.
- Chapter 3, Perceptions of Lean, presents the various views from research participants in terms of Lean's origins, its definition, approach and elements.
- Chapter 4, Implementation of Lean, describes the processes taken by the case studies and pilot sites in order to implement Lean.
- Chapter 5, Outcomes of Lean, examines both the tangible and intangible outcomes reported as a consequence of Lean. This chapter also reflects on the issues that led to failed implementation of changes as well as factors that support sustainability.
- Chapter 6, Contextual Factors and Organisational Strategy, evaluates both the internal and external factors and drivers that can influence an organisation's decision to engage in an improvement programme such as Lean. The issue of strategy is also examined as it is a key driver for linking Lean to effective improvement.
- Chapter 7, Organisational Readiness for Improvement, presents factors which affect the ability of an organisation to implement an effective improvement programme. These findings were found to be particularly critical in terms of the Scottish public sector's ability to engage in Lean and continuous improvement.
- Chapter 8, Summary of Research Findings, draws together the key findings in order to present the success factors and barriers in implementing Lean. The chapter also summarises the findings in reference to the four key questions (see 1.4).
B. Overview of the Lean Concept
1.8 This section will introduce briefly the concept of Lean. More detail on the history, application and components of Lean can be found in the literature review (annex 1). However, to aid the reader through this report some key terms and definitions can be found in the glossary in appendix 1 of this report.
1.9 There are many views of what constitutes "Lean thinking" or "Lean production". Although most people recognise the roots of Lean thinking in the Toyota production system , there has been considerable development of the concept over time. Womack and Jones are regarded by most as the originators of the term. They developed five core principles to represent Lean :
- Specify the value desired by the customer
- Identify the value stream for each product providing that value and challenge all of the wasted steps
- Make the product flow continuously
- Introduce pull between all steps where continuous flow is impossible
- Manage toward perfection so that the number of steps and the amount of time and information needed to serve the customer continually falls.
1.10 In practical terms one of the underlying assumptions made by Lean is that organisations are made up of processes. Hence, improvements made in a Lean context optimise the process or customer's journey rather than optimising individual departments. This perspective, which is widely applied in industry is sometimes referred to as the "process-based view" of organisations.
1.11 Hines et al (2004) present Lean from two perspectives - at a strategic level focusing on the principles and at an operational level focusing on the tools and techniques often associated with Lean (see Literature Review and Glossary Appendix 1). Figure 1.1 illustrates this relationship which, as the report will indicate and refer to, became an important distinction when assessing the use of Lean within Scottish public sector organisations.
Figure 1.1: A framework for Lean (Hines et al, 2004)
1.12 Given the origins of Lean thinking in the automotive sector, the application of Lean without appropriate adaptation for service organisations has been widely questioned. Whilst Bowen and Youngdahl demonstrate that Lean principles can be applied within the service sector, others (for example, ) highlight a number of the key criticisms associated with gaps in the Lean philosophy. The criticisms include: concerns about the increased vulnerability of Lean systems to errors or resource shortages; suggestions that Lean systems do not cope well with demand variability; potential failure to address human dimensions of work content and work environment; and a lack of strategic perspective when implementing Lean tools and techniques. Related to the last criticism some practitioners and writers of Lean see it as a holistic strategy that provides the adopting organisation with a coherent and consistent set of practices.
1.13 In terms of public sector organisations, the literature analysis found that, to date, little application and research has taken place with regard to Lean and the public sector, except in health (Walley, 2003; . In health, the Lean philosophy has been used to generate a process-based perspective within the NHS Emergency Services Collaborative in England. This work studied the demand for emergency care within two health communities and made recommendations for the redesign of parts of the system. This innovation is responsible for substantial improvements to patient waiting times.
1.14 However, this finding does not necessarily imply that Lean is not appropriate for public services. On the contrary the literature review indicates that many of the tools and techniques used at the operational level within Lean could potentially be applied within the public sector.
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