CIPFA Performance Improvement Network

Introduction to “Lean Thinking”

Brendan McCarron

Performance Advisor

CIPFA Performance Improvement Network

1. Introduction

This briefing has been written to provide an overview of lean thinking and its
application in the Public Services. The briefing will cover the following points:

●

history of lean thinking

●

underlying ideas and principles

c

systems thinking

c

5 main principles

c

public services and lean

c

waste

c

improvement teams

●

approaches to implementation

●

lean accounting

●

further references

2. History

Lean is a term popularised in the 1980's and 1990's to encompass a number of
approaches to managing manufacturing companies that included an emphasis on
systems producing exactly what the customer wants at the lowest cost and with no
waste. Many of the ideas were developed after the Second World War by Toyota. Their

imperative was and remains, increasing profitability in low or no-growth markets. The
focus was on producing cars of the best quality, at the lowest cost and with the
shortest lead time through the systematic elimination of waste. Because Toyota
developed so many of the ideas associated with lean, the term “Toyota Production
System” of TPS is used synonymously.
How Toyota and their suppliers work was studied and popularised in the West by the

book “The Machine that Changed the World, a study of Japanese car makers by
Professors Womack and Jones of Massachusetts Institute of Technology (MIT)
(Professor Jones is based in the UK and founded a centre studying lean-type
approaches at Cardiff University). Their original book was published in 1990 but,
many of the ideas had already been current in the manufacturing and service sectors

in different forms (see appendix). What Womack and Jones did was package these
ideas for a European and American market.

3.

Underlying ideas and principles

Since lean had been “codified”, the approach has been adapted widely to service and
public sector organisations in the UK and abroad. The most successful of these
adaptations seem to occur when service organisations seek to manage the series of

steps that produce value as a whole, rather than in bits or silos. This “systems”
approach has implications across the organisation, not least the measurement of

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productivity at the system level rather than by unit, which focuses management effort

on global rather than local efficiencies. For lean to work requires a culture that
supports continuous improvement and the consequent reduction of cost and
headcount from systems.

3.1 Systems

thinking

Central to understanding lean is an understanding of systems. This is often labelled
“systems thinking”. However, it is not well defined in the lean lexicon. In classical

systems theory a “system” is a series of interrelated steps through which work
(mainly information in our case). Systems bump up against other systems which may
feed it with inputs, receive its outputs, influence it in some other way or have no
effect upon it. The usefulness of this concept is that it helps us to understand that
changing one aspect of the system (e.g. procurement) affects other aspects (e.g.
delivery). These interrelationships are often obscure and therefore we approach

“improving” systems carefully to make sure that changing one aspect (e.g.
procurement) does indeed have the desired effect on (e.g.) delivery.
Lean helps to add detail to a systems view of the world by encouraging managerial
interest in the way work and information flows through the system, particularly where
it flows freely and where there may be bottlenecks. This allows us to focus

improvement efforts on those areas that will improve the whole system and avoid
sub-optimal changes.

3.2 Womack and Jones' 5 principles of lean

The basic idea of lean is attractively simple, it is that the organisation should be
obsessively focussed on the most effective means of producing value for their
customers. An organisation using lean will approach this challenge by: applying 5
basic lean principles; focusing on understanding waste and value in its work and;

training staff who do and manage the work to act as improvement teams to bring
about change. The 5 principles are:

●

Specify what customers Value – Value is what the customer wants and only
what the customer wants. This requires a precise understanding of the specific
needs of the customer. It is said (but I have never traced the source) that up to
95% of process activities are non - value adding. This is probably true,

depending on your definition of value adding vs supporting and waste in a
system

●

Understand the Value Stream – The value stream are those activities that,
when done correctly and in the right order, produce the product or service that
the customer values. A lean organisation traces and manages all the activities
in the organisation that deliver value wherever they are and whichever

department they are in. Activities can be: in whole or part unnecessary and
wasteful (and therefore, should be eliminated); supporting the value-adding
activities (which should be reduced as far as possible); and customer value-
adding (which should be continuously improved)

●

Improve the Flow – In a lean organisation work should flow steadily and
without interruption from one value adding or supporting activity to the next.

This is contrasted with the “batching” of work where, for instance a week's
expenses claims are collected for a manager to authorise in one go. Where it is
suitable, flow significantly speeds the processing and every effort should be

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made to eliminate obstacles and bottlenecks that prevent flow

●

Pull – The system should react to customer demand, in other words, customers
pull the work through the system. In non-lean organisations work is pushed
though the system at the convenience of the operators and so you produce
outputs that are not required. Most services react to customer demand and so
pull the work through the system

●

Perfection – As the first four principles are implemented you should get to
understand the system ever better and from this understanding you should

generate ideas for more improvement. A lean system becomes yet more leaner
and faster and waste is ever easier to identify and eliminate. A perfect process
delivers just the right amount of value to the customer. In a perfect process,
every step is valuable-adding, capable (produces a good result every time),
available (produces the desired output, not just the desired quality, every

time), adequate (does not cause delay), flexible, and linked by continuous flow.
If one of these factors fails some waste is produced (see below).

In their recent article for the Harvard Business Review on Lean Consumption (see
references for downloadable copy), Womack and Jones have set out six additional
principles of what they call lean consumption that that correspond closely with those
of lean production.

1. Solve the customer’s problem completely by ensuring that all the goods and

services work, and work together

2. Don’t waste the customer’s time
3. Provide exactly what the customer wants
4. Provide what’s wanted exactly where it’s wanted
5. Provide what’s wanted where it’s wanted exactly when it’s wanted
6. Continually aggregate solutions to reduce the customer’s time and hassle.

These principles recast traditional lean thinking principles to make us take a customer
eyed-view of our services. It is similar to the efforts marketers have made in recent
years to move away from the 4P's of Product, Price, Promotion and Place to Concept

(i.e. the benefit to the customer of the service), Cost (to the customer including
hassle and lost opportunities to be elsewhere doing something else), Communication
and Channel accessibility.
Rewriting lean principles in this way makes them easier to understand and apply to
services.

3.3 Public services and Lean

However, in public service organisations these principles need some additional

explanation because of the nature of the services. Some examples of the additional
issues are set out below.
3.3.1 What flows in the public service?
Public sector service organisations provide direct services to the public or other bodies
and some of these services are mainly the provision of information. Like all

organisations, public organisations have a supporting infrastructure that feeds the
front-line direct service or information service providers. There is a temptation,
reading the lean principles, to apply them to the most factory-like processes that exist

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in the public services, such as benefits administration where documents can be

understood to flow through an understandable system. This is, in fact, where most
lean efforts in the UK public sector have concentrated.
However, the greatest gains are likely to be made by focussing on how to ensure that
information flows actually convey the necessary information in an unambiguous and
complete format that is easily understood by all staff and customers. This opens the

door to applying the lean principles at the heart of organisations.
3.3.2 What is value in the public sector?
Value is sometimes difficult to specify in some areas. Many public services deliver
important intangible benefits alongside the tangible benefits. For instance the
perceived value of a piece of legal advice, and the action taken as a result of it, often

depends on the trust with which the customer views the provider. Trust is difficult to
quantify, but the speed of response to a request for advice and its intelligibility may
be measurable. The danger, in these circumstances, is that improvement efforts focus
on the short-term, easily measured aspects of the service and neglect the intangible
outcomes. It is necessary to balance short-term, proxy-markers of value with some
estimation of the true value of the service, even if wholly qualitative, in order that the

whole system (i.e. the value stream) can be identified and improved.
3.3.3 How does lean deal with high variability of customer demand and
service provision?
A defining characteristic of services is that the tasks that deliver them can vary in
time and standards. In manufacturing, standardisation of tasks is used to overcome

this, but much of the variability of services comes from the variability of input from
customers (customers buying cars specify their demands within a limited set of
alternatives; customers needing the help of social services tend to make complex and
variable demands on local authorities). In lean services this variability is reduced by
reducing the variability in performance between individual members of staff while

relying on their flexibility, intelligence and judgement to work effectively.
A common feature of public services is a relatively high variation in customer demand
by volume and type of services. A significant proportion of this demand is likely to be
generated by an earlier unsatisfactory experience (i.e. an earlier failure to deliver the
service effectively). There is also likely to be a degree of missed demand where

people give up trying to get through on busy telephones or modify their demands
downwards because of low expectations of our capability to help them. This requires
that service providers really understand who their customers are and the patterns in
their demands. When the demand is really understood, patterns can be identified that
help the organisation respond and improve.
3.3.4 Compartmentalisation
Another huge source of variability and errors in services derives from the many units
or compartments, inside and outside an organisation, that are involved in service
provision. This leads to many hand–overs of work and therefore chances of error,
delay, misunderstanding or variation. Because of the variety of organisations and
people that are involved, and because these risks are well known, there are often

many reviews and checks built into delivery systems. All these reviews and check are,
in lean terms, represent unnecessary work caused by the poor design of the system.
The complexity, the checks and reviews are what I call a “Pollyanna” opportunity -
because the situation is so bad, there is a big opportunity to improve it.

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3.3.5 Do we have process and system management in the public service?
The answer must be yes, we do manage our processes and systems because we do
deliver. However, it is not common to find that one individual has real responsibility
for running a system from end to end. This can limit the ability of organisations to
improve their services and strive for perfection. In other words, the complete answer
is that we do have process and system management but it is implicit in lots of

peoples' job descriptions rather than each significant system having one person in
charge.

3.4 Waste

Public services account for over 40% of the UK's GNP. It is a common approach to
split this total cost down into, at least, 5 types:

1. costs of work, done right first time, that actually delivers services people want

and governments demand

2. costs in supporting the work that delivers services people want and

governments demand, such as managing staff, reporting results, accounting for
costs, etc

3. costs of correcting work of type (1) or (2) until it is “right”
4. cost of doing work that is not necessary to actually delivering services people

want and governments demand

5. costs in supporting work of type (4)

Only type (1) work is worthwhile. All other costs are consequential of poor design or
execution of type (1) work. If we could eliminate this “hidden town hall”, “hidden
hospital”, “hidden department”, we would very significantly reduce the bill.
Lean is a way of thinking about work that is designed to improve the ratio of type (1)
work over all other work.
So, the aim of applying lean principles is to improve the quality of outcome for the
customer while reducing cost and headcount through waste reduction. At the strategic
level there is a kind of vicious circle of waste:

In this model, excess capacity to produce means that you do produce even if it is not
needed. This overproduction is seen in delivering of services that are not wanted at all

or delivering services at the wrong time (and where a tangible output is produced in
excessive stocks). You may also over-produce if you are simply in a position to deliver
services that are not required, an example is having too many staff available so that

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some are not working. Overproduction is the result of you pushing the flow of work

thorough your system, rather than allowing the customer to pull work through the
system by their demand. Excess stock lead to capital being tied up and the final
problem of unnecessary capital investment which leads to asset costs in interest,
depreciation, maintenance and other overheads.
In lean, waste is broken down into 7 specific types:

●

Over-delivering - volume

●

Waiting for the work to be ready for the next process

●

Conveyance or transportation

●

Over processing – because of poor design (i.e. not producing just what the
customer values)

●

Inventory levels that are too high

●

Human motion

●

Correction of defects.

The elimination of waste has been a management imperative for years. Lean offers
new ways to think about waste and this can lead to people becoming obsessed with
waste reduction or “industrial house keeping”. Poor (and quite common types) of lean
improvements often start by tackling these wastes in isolation, for instance, trying to

reduce stock levels alone. This can lead to an imbalance, disruption of flow and a
worse situation. Hence the need to consider carefully how to implement lean in service
organisations so that the system improves and not just some if its parts.

3.5 Improvement

teams

One of the characteristics of lean implementations is that staff are trained to apply
their knowledge about the processes they operate to improve their value added and
eliminate waste. This requires a high level of trust between staff and managers

because of the significant amounts of non-value adding support and waste that will be
uncovered. It is not unlikely that 20 – 30% of their time will be spent on doing tasks
that can be designed away or dropped altogether.
Improvement teams are normally drawn from, and led by, the people doing the work
but, may include some additional expertise. These improvement teams are normally

trained in the principles of lean and specific approaches such as: collecting and
analysing customer needs and demand data, value mapping, problem solving and
process redesign to eliminate error techniques. The trained teams are then used to
help improve their own system from the initial investigations, through to the
implementation and continuous improvement of the new ways of working.
These teams can be used to tackle a specific area of waste, to improve the flow of a
specific value stream or across the system as a whole. Such system-wide activities
need system-wide teams and leadership.

4.

Approaches to Implementation

There are many ways of applying lean principles to public sector organisations. There
are a number of consultancy firms actively selling their (well-protected) proprietary
solutions in this area. These are often focussed on waste reduction (see above) and

offer quick, sometimes spectacular, wins. But, these improvements are difficult to

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sustain if the organisation as a whole does not apply lean thinking.
In essence, all approaches to lean follow a similar path and can be explained in terms
of the Plan, Do, Check, Act cycle that most of us are familiar with.

4.1 Preparation

Plan

Act

Check

Do

Preparation

First pick your system. The success of an improvement initiative depends to a large
extent on the initial choice of what to improve and how to go about it. Often

organisations start with “factory” type services that have a fairly easy to identify
customer and where value can be more easily defined. However, to have maximum
impact, the systems that have to be tackled are those that have the greatest impact
on your organisation's goals.
Plan the piloting of the new work that will inevitably result from this work in the

“Check” stage and for the fuller implementation of the results in the “Act” stage now.
The impact on staff and other stakeholders needs to be planned for early. Staff will be
involved in the improvement teams and their work is more than likely to change. They
will have to be enabled to operate in the new environment. Customers and other
stakeholders may also need to be involved, or at least notified of the changes.

4.2 Plan

At this stage you must define and analyse the existing system from a customer and

stakeholder perspective. This normally means going to where the work is done in
order to understand its explicit and implicit purpose. You need to find out what the
customers, stakeholders and the organisation itself expects of the service in terms of
standards, costs, volumes, speed of delivery. Measures of expectations need to be
identified that will tell you if the system is working properly.
Customer, stakeholder and organisational expectations are then compared with what
the service was designed to deliver and what it is actually capable of delivering to
identify gaps between the value that is required and the value that is delivered. It is
important that demand is understood in order to separate work done in response to
customer demand from all other work (the hidden town-hall).
A flow diagram of the value stream is made in this stage that gives an overview of the
“as is” process, i.e. which bits add value and which are supportive or potentially
wasteful. This is the value stream map and the information in it, together with the
information on demand, is analysed to identify the reasons demand and flow varies

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and where improvements are possible.

4.3 Do

This stage is about moving the picture of the process from the “as is” to the “should
be” by identifying courses open that could be used to speed the flow by eliminating,
simplifying, re-designing and/or combining steps to reduce waste and chances of error
or other blockages. The effect is to minimise the number of hand-offs in the system
and maximising the clarity and availability of information available to the staff

operating the system. From these ideas, the most promising courses open are
identified that may be feasibly pursued in the organisation.
The flow diagram is updated to predict the improvement and measure the likely
improvement against the measured developed in the plan stage.

4.4 Check

This stage is designed to validate the effectiveness of the new system in delivering

exactly what is required smoothly and with the minimum of non-value adding support
and waste. Implement and update the outline plans for identifying opportunities for
piloting created in the “Preparation”. Use the pilots themselves as show-cases to help
persuade more areas to implement the new approaches.
Check the measures of success developed in the “Plan” stage to ensure that the ideas

are actually improving the customers' experiences and achieving the organisation's
goals. Implement the improvements more widely and develop a monitoring system for
long-term implementation.

4.5 Act

This stage is when the work moves from a pilot to “business as usual”. It is necessary
to monitor the implementation, learn from the new system and build in reviews to
collect customer, stakeholder and demand information. You should identify lessons

learned and develop plans for spreading these lessons across the organisation.
Remember that the aim is to get to a system that contains only work required to
satisfy customer demand when the demand is made on the new system.

5. Lean

Accountancy

As we have seen, lean organisations only do what they need to do to meet customer
and organisational requirements. They manage streams of work that add value –
systems, rather than discreet units. This challenges traditional unit-based cost

allocation approaches such as standard costing. This throws up new challenges in
identifying costs and allocating them to these value stream systems.
Lean is also concerned with speeding the flow of work through the system and
improving quality. This may impact on traditional cost control systems that may be
simply too slow to keep up with the demands placed upon them. However, most of

these issues have already been solved in industry and in the NHS so, although they
may be new they are not insurmountable.

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6. Further

References

There is a wealth of information about lean in manufacturing and health in books,

articles and websites, less about lean in services and government. I have listed a few
useful recent articles and a couple of good websites that give a good introduction to
the subject.
Articles and Papers

●

Lean government (is not an oxymoron) Hasenjager, Jan Industrial
Engineer July 2006

The demand for customer-driven waste reduction is as characteristic of public-sector
government operations as it is of private-sector manufacturing. As in the private
sector, government agencies are increasingly operating in a competitive environment.
While in private-sector manufacturing the competitive threat often comes from
overseas producers, government institutions must confront the ever present threat of
privatisation. Responding to this threat and the expectations of government’s ultimate

customer, the taxpayer, the Connecticut Department of Labor (CTDOL) positioned
itself in the forefront of the quest to eliminate waste in its processes and delivery of
services.

●

Leaning healthcare Jones, Daniel T Management Services Summer 2006

Healthcare is the next great industry to begin the lean journey. The existing model in
which the hospital doctor acting as a skilled crafts-person, effectively managing their

own waiting list of patients, clinics and operations inside someone else's mass
production general hospital, is reaching the end of the road.

●

Lean Consumption Womack, James P. and Jones Daniel T. Harvard
Bsiness Review March 2005

●

(

http://custom.hbsp.com/b01/en/implicit/custom.jhtml?pr=LEANER0503C2005

030462

)

Lean production transformed manufacturing. Now it’s time to apply lean thinking to

the processes of consumption. By minimizing customers’ time and effort, and
delivering exactly what they want when and where they want it, companies can reap
huge benefits.

●

Lean thinking for the NHS Daniel Jones and Alan Mitchell NHS
Confederation 2006

●

(

http://www.nhsconfed.org/docs/lean.pdf

)

We asked the Lean Enterprise Academy to look at how Toyota’s approach to

production could be applied to healthcare. This is not as odd as it first appears. The
Toyota system – often known as Lean – has been applied in many environments,
including healthcare (and not just manufacturing) for some time now, with staggering
improvements in quality and efficiency. The underpinning values of removing activities
that don’t add value and of respect for people and society lie at the heart of
healthcare. And the principles on which Lean is based are generic. They can be

applied anywhere: at home, in a bank, GP practice or hospital.

●

Bringing Lean To the Office by Len Tischler Quality Progress July 2006

Lean manufacturing principles can produce more immediate results than other quality
techniques can. A team of college students used lean to streamline processes in their
university’s admissions office. The students were able to reduce a process that took

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two to three weeks to about one day.

●

Lean Success in an Administrative Environment Mick Corrie Target
(journal of Association for Manufacturing Excellence) Volume 20,
Number 1

●

(

http://www.ame.org/MagazineOnlinePDF.aspx?artid=1972

)

Does lean translate to administrative areas? Our experiences at Waukesha Bearings
Ltd. put this question to the test, specifically within our sales and engineering office
headquartered in Northwood Hills on the outskirts of London. The company is a

subsidiary of Dover Diversified Corporation and Dover Corporation (NYSE: DOV), a
specialist engineering company that designs and manufactures bearings. Our products
are tailored to meet customer needs in a variety of rotating machinery applications for
power generation, oil/gas, chemical, and industrial use. Our lean journey began in
November 2001 when George Koenigsaecker (chairman of the Shingo Prize), visited

our executive team to discuss the potential of a "lean conversion."

●

Going Lean - A Guide to Implementation by Peter Hines and David
Taylor, March 2000 Cardiff University

●

(

http://www.cf.ac.uk/carbs/lom/lerc/centre/publications/downloads/goinglean.p

df

)

This 52 page report was developed during the Lean Processing Programme - LEAP -
(1997-2000), a research programme run by LERC and sponsored by the Engineering

and Physical Science Research Council and a network of UK automotive/steel supply
chain firms. The LEAP programme was designed to extend lean thinking into this
particular group of firms and their associated customer base, seeking to make radical
and incremental change both within and between firms as well as at the network
level. The report will help those individuals or companies understand the processes,
framework and tools required to transform an organisation on lean lines.

●

NHS Lean Implementation handbook (draft) 2006 NHS Institute for
Innovation and Improvement

●

(

http://www.networks.nhs.uk/uploads/06/01/lean_implementation_handbook.d

oc

)

A draft of a practical lean approach proposed by the NHS Institute for Innovation and
Improvement

●

Lean Six Sigma: some basic concepts NHS Institute for Innovation and
Improvement 2006

●

(

http://www.institute.nhs.uk/NR/rdonlyres/73BB5F94-469A-4440-B31E-

90A57F921D48/0/LeanSixSigmafinalpdf.pdf

)

This mission (to improve healthcare) requires multiple improvement strategies on
multiple fronts. On one level, it requires nothing less than fundamental redesign of the
healthcare system. At another level, it needs on-going incremental improvement of
existing services.
We have tested and utilised a wide range of improvement strategies in our quest to
create faster, more effective change. This has included Lean and Six Sigma, both of
which have delivered promising results, particularly when combined with other tools
and techniques. Pioneers are undertaking early testing of the approach. Our latest
endeavour involves the integration of the two into an approach we have labelled ‘Lean

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Six Sigma for healthcare’. This paper sets out some of the principles underpinning the

approach.

●

Health Service Journal Quality and Value Supplement April 2006

●

(

http://www.institute.nhs.uk/NR/rdonlyres/1390678B-0B9F-4304-8A99-

D7515C546BDE/0/HSJproductive_time_supp060406.pdf

)

Quick wins, how the productive time programme is cutting costs and advancing care.
A range of articles on practical approaches, including lean.

●

Evaluation Of The Lean Approach To Business Management And Its Use
In The Public Sector (Scottish Executive) Published June 16th 2006

●

(

http://www.scotland.gov.uk/Publications/2006/06/13162106/33

)

This report provides an overview of work conducted by Warwick Business School,
funded by the Scottish Executive, to investigate the use of the ‘Lean’ management
concept in the Scottish public sector. The objective of this report is to present the
evidence of the evaluation of Lean in the public sector as a means to embed a
continuous improvement culture. The report takes evidence from four sources: a

literature review, a cross-case study analysis, a survey report and a pilot evaluation.
The case studies, pilot studies and the survey focused on Scottish public sector
organisations and were undertaken between June 2005 and March 2006.

●

A systematic approach to service improvement in housing ODPM
September 2005

●

(

http://www.communities.gov.uk/embedded_object.asp?id=1150481

)

This report provides a review of work undertaken to explore the use of ‘systems

thinking’ in a social housing setting. In particular, the research considered the effects
on the delivery of housing management and maintenance services and assessed
efficiency gains arising. In December 2006 the Northern Housing Consortium
published a follow-up document that tracked what had happened to these pilots. This
report is available here:

●

http://www.northern-
consortium.org.uk/assets/northern%20futures/performanance/systems%20thin

king%20sustainability.pdf

Websites

●

Professor Daniel T. Jones is the Welsh co-author of “Lean Thinking” and one of
the leaders in driving lean approaches in the UK. He is chairman of the Lean
Enterprise Academy, based in Herefordshire:

http://www.leanuk.org/

●

A “Lean Blog” with lots of links and information:

http://www.gembapantarei.com/

●

Lean Institute of the Netherlands holds an extensive library of articles,
presentations and videos that can be downloaded (mostly in English):

http://www.leaninstituut.nl/publications/index.htm

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Annex: Extracts from Counting Down To Competition 1995

In 1995 I worked on an Audit Commission Management Handbook for preparing
finance departments for CCT and in it I set out some ideas on value added, error
prevention and simplification of processes that pre-date lean.

Particularly for transaction-based services, the design and operation of processes are
critical to efficiency and effectiveness. Inefficiency and ineffective processes feed
through to higher coasts: the first directly through higher staffing levels, the second
through higher error rates. Errors are a consequence of high levels of variations and
adjustments, especially where manual input is involved: their elimination should be

major priority for providers.
The principal causes of errors can be addressed by a range if solutions (see the box
below). Accuracy can be further promoted through certain minimum levels of control:

●

responsibility for accuracy, completeness and timeliness of processing is placed
on individual employees

●

employees check the accuracy of their own work as it is performed

●

there is a set procedure for recording, analysing and rectifying all errors

●

managers are responsible for taking appropriate corrective action flowing
analysts of errors and for ensuing the effectiveness of this action.

Box Errors: causes and solutions
Error Types

Remedies

Misinterpretation Task

simplification

Standardisation
Procedural notes

Inadvertent User

training

Check-lists
Task redesign to reduce fatigue and monotony

Lack of staff skills

Fail-safe systems
automation
aptitude testing
training
task simplification

In addition to reducing errors, providers should explore opportunities for changing

processes to improve efficiency. This is an area where managers may find it useful to
buy in specialist systems expertise. There are three principle routes to improving
efficiency:

●

aligning processes between different services to allow multi-tasking of
employees

●

rescheduling activities to minimise on-line processing at times of peak demand
(when IT charges are at their highest)

●

analysing value added at different stages of the process, given that not all
stages add value (see exhibit overleaf). Authorities should identify low value-

adding stages (for example transporting and storing information, and correcting
errors) where the call on resources can be reduced or eliminated

Introduction to “Lean Thinking”

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CIPFA, December 2006

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CIPFA Performance Improvement Network

Exhibit Financial Services Processes – Not all stages add value...
(source Audit Commission)
Further advantage can be gained from reviewing flows of work. In such a review,
providers should explore three questions, again using specialist systems expertise:
Can work be eliminated (for example the production of unwanted and unused
management reports), merged (for example bringing together separate processes for
mileage and expense claims), or simplified (for example by redesigning paperwork)?
Can service uses do more for themselves – for example, through on-line input?
Can work be better scheduled, with an improved balance of work between different
teams and individuals?

Please send any comments to:

Brendan McCarron

Performance Advisor
CIPFA Performance Improvement Network

E:

[e-mail]

M: 07810 547226

Introduction to “Lean Thinking”

©

CIPFA, December 2006

13