Lean administration – the fight against waste in administration (Part 1)

In addition to classic process optimization, various lean management and lean administration approaches have been developed in recent years to analyze and optimize administrative processes in companies and businesses in a value-added-oriented manner alongside production processes.

With the increasing exploitation of production potential, the optimization of business processes in a high-wage country like Germany is also becoming more and more important. This applies to manufacturing companies as well as pure service companies and public administrations.

Optimization potential through lean administration

The potential for improvement that can be achieved through lean administration is largely underestimated. Administrative processes to be optimized can be found in all areas of a company and along the entire supply chain, including supplier and customer processes. Particular attention should be paid to the interfaces between the individual departments and areas during optimization, as this is where hidden potential often lies. In principle, it can be assumed that around one third of all administrative activities are “unproductive” – i.e. wasteful.

The approaches used in the “fight against waste” are all based on the five principles of lean thinking. These five approaches known from production can be applied very well in detail to administrative areas. This can be seen in the following explanations:

The five principles of lean thinking

1. Customer orientation
At the heart of lean administration is the value of a product or service from the customer’s perspective, both internal and external. The customer only pays for a product or service that offers them recognizable added value. It is therefore important that any customer requirements are known or scrutinized in detail.

2. Identification of the value stream
Activities that do not add value are wasteful and should be eliminated as far as possible. This requires a detailed analysis of which activities are actually necessary and which can be dispensed with.

3. The flow principle
The flow principle means that the various work steps up to the finished product or service are seamlessly interlinked without delay. Waiting times or duplication of work are wasteful and must therefore also be eliminated. Uninterrupted workflows without interfaces accelerate a process sustainably.

4. The pull principle
This basic principle states that only the products or services actually required may be created. A service should only be provided when the customer actually needs it. In this way, any form of overproduction or incorrect production can be avoided.

5. Striving for perfection
Only by constantly questioning whether the processes defined as efficient in the past are still efficient in the event of any changes to the framework conditions, adjustments to customer requirements, new technologies or legal requirements is it possible to ensure continuous optimization and safeguard efficiency.

Based on these fundamental approaches, the lean administration methodology can be used to leverage the existing potential in administrative and service processes and optimize the processes under consideration in the long term. The goal is clear: every activity must actually contribute to value creation and unnecessary processes must be eliminated. This not only increases productivity and efficiency in administrative areas, but also reduces throughput times and increases availability. Through the consistent implementation of lean administration, the company gains transparency in the processes under consideration and, with the help of a process cost analysis, can also allocate, control and reduce costs more precisely and in line with their origin.

Differentiation between the main activities, necessary activities and organizational activities

Making a clear distinction between the main activities, necessary activities and organizational activities is a central prerequisite and enables the appropriate approach to optimization to be selected for each type of activity.

The value-adding activities of a process are summarized under the main activities; the secondary activities are necessary but do not add value and must therefore be viewed critically. Organizational activities often compensate for processes that are not optimally coordinated and should therefore be reduced to an absolutely necessary level.

In addition to insufficiently coordinated processes, waste can also be caused by non-functionally designed workstations. There are often numerous and time-consuming queries, especially at interfaces.

The positive effects of lean administration on indirect areas are comparable to the results of introducing lean production in the manufacturing industry. This results from the fact that all known types of waste can be found in the administrative and indirect areas that also exist in production. These can all be easily transferred to administration. Examples of waste in the administrative areas are duplication of work, high work inventories or long throughput times.

You can find the second part of this article under Lean Administration – Combating waste in administration (Part II)

Image source: © Wassermann AG