Tag Archive | Global vs local

Global vs local

This concept of “global vs local optimization” is often misunderstood. It seems obvious that splitting a process in pieces and improving them separately must improve the global performance of the process. Sadly, this is not necessarily true. What makes a part of the process excel could be exactly what kills other parts. This “what-improves-me-kills-you” effect happens more often than you might think and its effect is terrible, since the less effective part of a process impacts heavily its performance.

This simple example created by the Lean Management Institute illustrates this idea:

Prueba

Genuine improvement (which means improving things your customer really cares about) rarely happens without a global approach. Focusing in isolated parts of the process will, in the best case, improve the local efficiency of an area or department but will have little impact in your customer’s satisfaction. In the worst case, everything will work much, much worse and you’ll spend hours (weeks, months…) wondering why.

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Myth: Lean hates functions

functions

It is not uncommon to find people who think that Lean hates functions (e.g. “Engineering”, “Sales”, “Marketing”, “QA”, “IT”…) This is not true. Lean recognizes functions as key elements to preserve technical knowledge and develop people, therefore they are fundamental for a company.

The problem is somewhere else. Most companies are organized by functions and, as a consequence, separate functionally the management of the process, believing that this will improve performance. The rational is that if you break a process in pieces and improve each of them as much as possible, creating big functional experts, then the process must be the best possible. Sadly, this is not true in most cases, although common sense tells you that this should work.

The problem with the previous approach is that breaking the process in pieces and optimizing each of them individually gets (in the best scenario) local optimization but a lot of waste for the process globally. Process alignment and one unique manager that owns the work end-to-end with all the functions reporting to him/her is an ideal solution (although sometimes counter-intuitive). Why?:

  • One process performed by different functions or departments increases probability of handoffs, queues and quality issues (loss of information, additional sorting). This, apart from creating quality problems, generates more lead time and waste.
  • One only person responsible for the process increases overall performance: one person is responsible for the full process, prioritization and decision-making are easier and information flow is better.
  • From the customer perspective, they can communicate directly with one person about process issues. This makes the response to problems faster. Cross-functional training is easier to do, what creates even more flexibility and responsiveness to problems.
  • Team members belong to a group who owns the process (and not just support it). This increases ownership and motivation, since work is not just “another project for another guy” but “improving my own work”.

I recommend the book “Lean Office and Service Simplified” (Drew Locher, CRC Press, 2011) for more information about using Lean and integrating functions, especially for service processes.

Functions are like a knife: very useful but dangerous if they are used wrong.

Picture from: http://blog.virtuallogistics.ca/bid/41204/EDI-is-it-a-Business-Function-or-an-IT-Function