Lean UK – Value Creation for Public Services

By Paul Xavier Jones

“The greatest cuts in living memory…”

“Never has so much been cut, by so few, in so little time…”

There has been a media frenzy on reporting what the current UK Coalition government has decided to do about cuts in Public spending and tightening the public purse. There is hardly anyone in the country who will not be affected by this in some way or another.

There are plenty of people who will condemn it, and also who will support it, but one thing is for sure; if the cuts are to services, then there is only one way to deliver an acceptable service level and sustain it. It is a way that the private sector in the UK has been forced to adapt over decades of mass production competition from overseas competitors with lower labour costs.

That way is “Lean Thinking.”

Quite possibly, Lean Thinking is one of the most misunderstood business methodologies in the world. This may because “lean,” can often be found alongside another word, “mean,” and when used together, applies to businesses and organisations that wish to streamline their workforces.

And yet, nothing could be further from the truth.

The best definition of Lean is –

“Delivering exceptional client or customer value at the lowest possibly cost, by the ruthless and relentless pursuit of waste.”

It is important to understand the first part of this definition – “exceptional client or customer value” – this is about making sure the organisation understands firstly what the client or customer does actually value, and is something that many organisations fail to grasp.

One organisation that has grasped this fully is Tesco. They have an exceptional understanding of what the customer values.

And how do they gain this understanding?

Simple. They use their Tesco Club card.

The Tesco Club card is really dual purpose. Yes, it helps lower the cost of many items and services for those who use it, but it is also one of the most sophisticated and powerful data collection tools ever used by an organisation.

Tesco have a database behind their Club card that probably rivals any governmental one; it has statistics about all aspects of our lives that it can gain by simply understanding what we buy.

That is why Tesco is so far ahead of its competitors in its dominance of the UK market.

The second part of the definition is “at the lowest possible cost.” This says exactly what it means – lowest possible cost, not price. If an organisation can provide goods or services at a low enough cost and have a competitive price, it is far more likely to grow and prosper than its rivals who may be more expensive.

And finally, there is the last part of the definition, “by the ruthless and relentless pursuit of waste.”

So what does “waste” mean in this context?

It applies to all unnecessary activities involved in the provision of goods or services. This can include things like checking documentation several times, or delays in the process, sometimes known as “bottlenecks” – where one part of the organisation can work significantly faster than another, and therefore ends up having to wait for the slower part.

This is where the public sector can learn from the private.

Organisations that use “Lean Thinking” and truly understand it do not use it to streamline their workforces, but rather re-deploy their personnel to creating value in other parts of the organisation.

Paul Jones is Senior Associate Advisor at CPM21, a provider of Business Advice and Training for Professional Services.

“Xavier” is his pen name under which he has written 6 books, details of which can be found at;

http://darkdomains.wordpress.com

http://www.facebook.com/xavierbooks