'Lean management will never work here...'?
It’s well reported that the maritime industry is in a spot of bother. Naturally, perhaps, in such times managers are inclined to reach for traditional ‘tools’ like redundancies and squeezing suppliers to reduce headline costs. But simply firing people and beating up suppliers can just destroy capacity which ultimately introduces more ‘cost’. Perhaps we may merge or buy other businesses as we try to generate efficiencies, but sometimes it seems we don’t have much idea of what we’re going to do with those new businesses. The outlook can seem bleak. Yet what if there was a tool that was more valuable than acquiring another brand-new client? What if that tool was sustainable and had the potential to yield tangible benefits, like cash?
Concepts like ‘lean management’ are not often used in the maritime sector, yet it’s a well-established tool and a sustainable means of extracting cost. Its’ effect on the bottom line is the equivalent of a new client. So, why would anyone ignore it? – yet we do. If we think of ‘lean’ at all - and, admit it, we don’t - we think of manufacturing. But lean is not just about manufacturing. Lean is about standardising any work processes to make problems visible so we can solve those problems and then improve processes. Extracting cost is the product of those improvements.
Maritime businesses are service businesses – the processes in our work are often long and complex; every transaction can be unique and requires lengthy and special consideration. Much of the work we do involves multiple parties and series of seemingly disconnected operations. Much work only takes place in our heads and behind our computer screens, it’s completely invisible. Of course, we’ll be told, lean ‘will never work in the maritime sector…’ and so we go on squandering opportunities to improve. When we do that, we’re accepting cost and thereby squandering cash. It is precisely because our processes tend to have long cycle times with many complex variables, multiple decision points and interactions with a variety of internal and external sources that lean philosophy is such a great fit—it can be of huge benefit in extracting cost for our maritime businesses. Service processes are often not usually physically observable, so tools like visual management that make otherwise invisible work processes visible, are especially useful. When there are deviations between what we expect to happen and what really does happen, we have an opportunity to improve a process and extract cost.
If your maritime service organisation currently doesn’t practice lean (and it doesn’t, does it?) try this slightly facile experiment: Find a group of colleagues that do similar work, such as entering data transactions, managing cargo bookings, taking client instructions or even cargo handling.
Give each colleague a different coloured pad of post-it notes and together choose just one process that all colleagues regularly undertake. Ask each person to write down the steps that they take to do the work on a separate post-it note. Once each person has completed their post-its, stick their notes in a row—one row for each colleague, one above the other—onto a whiteboard. All your colleagues will expect that they are doing the same steps as each other and therefore expect that all the rows of post-it notes will be the same length and contain the same number of steps performed in the same order…except they won’t. After completing the exercise, look. None of the rows will be the same length or have the same steps in the same order. This is a facile example perhaps, but it’s precisely why it’s important for service organisations, with complex processes and multiple decision points, to use tools to make processes visible. Only when our people are doing the work in the same way, each time can we guarantee that our internal and external customers are getting consistently high-quality services each time.
If our colleagues aren’t constantly pushing their critical thinking skills to improve a process, we can’t begin to extract cost. How can we then be sure our business can respond to demands for services of increasing levels of complexity and then make the right decisions to satisfy our clients and keep them from going to the competition? By using the tools that lean management offers us, we can develop standard processes for doing work that are visible. When a process is visible it can then be quantified and we can estimate the time necessary for a task and establish effective routines for work. When a process becomes visible we can refine and improve it and so extract cost.
So, ‘Lean’ isn’t just about manufacturing. It’s about standardising work processes to make problems visible. It’s about developing our colleagues’ abilities to solve problems and then refine those processes to extract cost. That, I suggest, is more sensible than simply slashing head-count.