Lean in HR – Why bother?
A critically important issue in Lean success is the relationship between Human Resources (HR) and Lean transformation.
There are two facets to the relationship between Lean and HR. First, the HR function like any other department in the company needs to apply Lean principles towards process improvement of its own work. Secondly, the HR function needs to actively support Lean transformation through out the organisation.
In addition to these broad areas of focus, robust policies and practices need to exist to enable an organisation to sustain its Lean journey.
Lean HR case study
We were contacted by the MD an organisation in Kent who, quite simply told us his business was in a desperate situation. The strange thing was, sales were strong and at first glance it seemed like a fairly healthy business. However, a review of the management accounts and in an depth Lean diagnostic by a KPS associate soon uncovered a different story.
About the organisation
The business operates 2 x 12 hour shifts, 5 days a week, employs 140 people and had a turnover in the region of £15m.
It had established good relationships with its customer base and consistently provided an extremely flexible and responsive service. But, as with many businesses of this size, they faced some significant and unique people and operational challenges as well as the continuing pressure to contain costs, improve quality and offer competitive pricing.
The introduction of new HR policies and practices and succession planning was becoming an increasingly important consideration, day to day operational activity continued to take up much of the MD’s time.
With this in mind, we began with a 3 day Lean evaluation:
The evaluation approach
The approach taken included one to one interviews with staff using the KPS Lean Benchmarking diagnostic tool, informal ‘chats’ with operators and general observations of the departmental processes.
By benchmarking the organisation against other business in a similar sectors it soon became clear the key areas to focus the Lean improvement activity.
The findings were presented in a simple SWOT format (Strengths, Weakness, Opportunities and Threats) and uncovered a complex range of issues:
General challenges identified
- Lack of visibility of future work load – short lead times
- Migrant (polish) workers – cultural differences
- Pay equity issues arising where different skills are required
- Literacy levels of some workers
- Limited skills in local labour pool
- MD was heavily involved in day to day operational processes
- Very limited management capability
- Bottleneck process
- Space constraints at the site both internally and externally
- MD did not have the confidence to delegate
- Supervisors did not work as a team
- Supervisors had limited management skills/training
- Evidence of favouritism by supervisors
- Day to day organisation of people & tasks was very poor
- No respect for supervisors by workforce
- Overtime not well managed
- Roles and responsibilities not clearly defined for supervisors
- No visible leadership on night shift
- Operator disciplinary issues!
- Insufficient labour to operate efficient night shift
- Roles and Responsibilities not defined
- Little or no evidence of effective team working
- Literacy levels very poor with many operators
- One or two ‘disruptive’ characters caused significant problems
- Communication a challenge with some Polish workers
- Recruitment of operators done with little thought
The chaotic approach to management of the business and lack of competent leadership at the supervisor level had contributed to an organisational culture which was extremely negative.
It became self evident that any focus on operational productivity improvement would be a complete waste of time until some of the critical HR issues were addressed.
A priority action plan was developed with the MD using Lean HR principles.
One of the key goals was to improve the level of supervisory skills across the plant and develop a more empowered workforce that would drive an effective and sustainable continuous improvement program. Whilst loyal and committed to business, supervisors demonstrated a variety of serious limitations e.g. Language, Literacy, man management skills, Delegation, Planning, organisational skills.
What happened next?
Alturos worked with the MD to develop a structured action plan which had three streams of activity running in parallel
1. Coaching and mentoring – of the MD and Supervisors which started with an assemenet using a leadership competences framework and followed with a series of confidential one to one meetings. This enabled them to recognise their current level within each of the 12 management competences – this formed the basis for the ongoing mentoring activity.
2. HR Policies an practices
KPS offered support and guidance to implement a range of Lean HR policies and practices that were considered to be most critical:
- Renewed organisation structure and reporting relationships
- Job descriptions – roles, accountabilities and tasks
- Person specifications – competencies (skills, knowledge and behaviours)
- Skill versatility and training plan
- Personnel records, including health declarations, absence recording, disciplinary records etc
- Statements of Written Particulars and/or written contracts of employment
- Company handbook or essential procedures
- Performance management – appraisals program.
3. Lean awareness training
All staff were taken through a one day Lean awareness training session. This meant that the whole workforce understood that Lean was a critical part of the overall business strategy and that their involvement and contributions was important. This session generated over 100 improvement suggestions to contain costs, improve quality and increase overall productivity.
How are they doing now?
One of the most radical suggestion that came from the Lean awareness training was to stop the night shift. Initially the MD was astounded at this suggestion, however the Lean diagnostic proved that (with the implementation of lean principles) their was sufficient capacity to run the business on a single shift. This made a saving over £76K per annum and resulted in an increase of ‘right first time’ quality performance from 73% to 96%.
In addition to the productivity savings, the full range of Lean HR practices have been implemented and, most importantly – are being maintained and developed further by one of the senior administrative staff.
Of the 3 supervisors that were initially provided with a personal mentor , one decided to leave the company (Lean was not for him!) and the other two are now leading successful Lean improvement projects within their own departs.
So…why bother with Lean HR?…well this organisation realised that installing robust Lean HR processes was a prerequisite to effective lean transformation within the operational side of the business.
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