Process design and improvement - Lean principles and waste r...

Learning Outcomes

After reading this article, you will be able to explain the core Lean principles used in process design and improvement, identify the eight wastes (muda) in business processes, and describe practical Lean tools for eliminating waste. You will understand how continuous improvement applies to organisational efficiency and be able to assess process maps to suggest improvements for real-world scenarios in the ACCA Business and Technology (BT) exam.

ACCA Business and Technology (BT) Syllabus

For ACCA Business and Technology (BT), you are required to understand how Lean principles and process design contribute to business efficiency and effectiveness. For revision, focus on the following points:

• The meaning and goals of process design and improvement in business operations
• The principles of Lean and their application to process management
• Identification and classification of waste in business processes
• Tools and techniques for designing efficient processes and reducing waste (e.g. process mapping, 5S, continuous improvement)
• The role of employee involvement and continuous improvement (Kaizen) in achieving operational efficiency

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What are the core principles of Lean in relation to process design and improvement?
2. List three types of waste (muda) according to Lean thinking and give one business example for each.
3. Which process improvement tool is commonly used to visualise and analyse current workflows?
4. Why is employee involvement essential in sustaining process improvements under Lean?

Introduction

Processes determine how products and services are created and delivered. Effective process design aims to maximise value while minimising unnecessary actions and resources. Lean principles provide a structured approach to reduce waste and increase efficiency, leading to sustained improvement and competitive advantage.

Key Term: process design
The planning and organisation of work tasks and workflows to optimise efficiency, quality, and value in business operations.

Principles of Lean Thinking

Lean is a management approach originating from manufacturing but applicable in all organisations. Its goal is to deliver the highest value to the customer using the least resources by eliminating wasteful activities.

The Five Core Lean Principles

1. Define Value – Understand what customers consider valuable and focus on delivering it.
2. Map the Value Stream – Identify all steps in a process and distinguish value-adding from non-value-adding activities.
3. Create Flow – Ensure smooth progression of work without stops or delays.
4. Establish Pull – Produce goods and services in response to actual demand, not forecasts.
5. Strive for Perfection – Pursue continuous, incremental improvement in all processes.

Key Term: Lean
A philosophy and set of methods focused on maximising customer value by eliminating process waste and optimising workflows.

Worked Example 1.1

A bank wants to process customer mortgage applications faster. Applying the Lean principles, what initial steps should the bank take?

Answer:
First, the bank should define what customers value (e.g. quick response, transparency). Next, map out the current mortgage application process, identifying delays or duplications. Then, reorganise the steps for smooth flow, ensure applications are processed as needed (pull), and pursue ongoing improvements to reduce errors and waiting times.

Process Waste and Its Elimination

One of Lean's main contributions is highlighting types of waste (Japanese: 'muda') that do not add value but consume resources.

Key Term: waste (muda)
Any activity in a process that uses resources but does not add value for the customer.

Key Term: value-adding activity
A process step that directly transforms a product or service in a way that the customer is willing to pay for.

Key Term: non-value-adding activity
An action or process that consumes resources but does not contribute value from the customer’s viewpoint.

The Eight Wastes (TIMWOODS)

Lean identifies eight classic types of waste:

1. Transportation – Unnecessary movement of people, materials, or information
2. Inventory – Holding more stock than required
3. Motion – Unneeded movement by people (e.g. excessive walking)
4. Waiting – Idle time when resources are not being used productively
5. Overproduction – Creating more than is needed, too soon
6. Overprocessing – Doing more work or using more expensive resources than required
7. Defects – Errors or quality problems leading to rework
8. Skills – Underutilising talents and skills of employees

Table: Example Wastes in an Office Setting

Worked Example 1.2

A distribution company runs monthly inventory counts, leading to frequent duplicate item entries and unnecessary corrections. Identify two types of Lean waste present and suggest a remedy.

Answer:
The main wastes are Defects (duplicate entries) and Overprocessing (unnecessary corrections). Remedy: Review and standardise the inventory recording procedure, use error-proofing (e.g. barcoding), and train staff to enter data accurately.

Tools for Process Design and Improvement

Several Lean tools help businesses visualise operations and identify improvement opportunities.

Process Mapping

A process map visually represents the sequence of steps in a process. It helps to identify bottlenecks, redundancies, and non-value-adding steps.

Key Term: process mapping
The practice of documenting the workflow in a visual diagram to highlight each stage in a process for analysis.

5S Method

5S is a workplace organisation tool designed to improve order, cleanliness, and efficiency.

1. Sort – Remove unnecessary items
2. Set in Order – Arrange items for optimal workflow
3. Shine – Clean the work area
4. Standardise – Establish consistent practices
5. Sustain – Maintain and review the standards

Continuous Improvement (Kaizen)

Key Term: continuous improvement (Kaizen)
The practice of making small, regular improvements to processes to improve quality, efficiency, or performance.

Employee Involvement

Employees working in a process are best placed to spot inefficiencies and suggest improvements. Lean encourages involving all staff in improvement initiatives.

Worked Example 1.3

In a service desk, staff spend time searching for client information in multiple systems. Which Lean tools could be used to address this, and what initial steps should be taken?

Answer:
Process mapping can identify redundant searches and delays. Apply 5S to organise digital files and consolidate data sources. Encourage feedback from staff to suggest system improvements.

Exam Warning

Always distinguish between value-adding and non-value-adding process steps in ACCA questions. Failing to identify wasteful activities may result in incomplete answers. Use Lean principles to guide your analysis.

Summary

Lean principles in process design aim to maximise value and eliminate waste. By mapping processes, targeting the eight wastes, and involving employees in continuous improvement, organisations can increase efficiency and improve service quality. Practical Lean tools such as process mapping, 5S, and Kaizen should be applied systematically for lasting results.

Key Point Checklist

This article has covered the following key knowledge points:

• State the five core Lean principles driving process improvement
• List and describe the eight types of waste (muda) in Lean
• Recognise examples of value-adding and non-value-adding process activities
• Use process mapping to analyse and improve business workflows
• Apply 5S and continuous improvement (Kaizen) in process design
• Explain why engaging employees is essential for effective process improvement

Key Terms and Concepts

• process design
• Lean
• waste (muda)
• value-adding activity
• non-value-adding activity
• process mapping
• continuous improvement (Kaizen)