Why you should be Lean before your robots go GIGO
Lean is a toolbox to increase value adding delivery time and decrease waste
The idea of Lean is to maximize customer value while at the same time, minimizing waste. This leads to more customer value with less resources required.
Initially, Toyota started to find ways on how to produce cars with very little amount of money and reduced «waste» due to shortcomings on global supply markets. A first step towards «Lean production» was made. Lean is now widely used in the manufacturing sector – but how about the financial sector?
Non-coordinated cuts today are the added costs of tomorrow
In banking, we see a pattern of how capacity is being saved on a yearly basis. At the end of every year, hundreds of employees are laid off in a «cost cutting exercise» due to ongoing cost pressures and «failing to hit the target». The following year, hundreds of new (temporary or freelance) employees are hired. The advantages of this strategy are debatable at best. What we also see is a lift & shift of tasks across different departments where eventually, delivery quality drops combined with the loss of knowledge.
Garbage in Garbage out, the same – just faster
Automation technology such as Robotic Process Automation (RPA) is often seen as a magic bullet to all inefficiencies in various areas of operations. While the virtual workforce can certainly perform some processes faster than a human, it basically still works as GIGO – garbage in, garbage out – if systematic process deficiencies are not eliminated. GIGO defines a process that by definition, will not add much value regardless of how fast or often it is performed – technology alone will not be able to solve this problem.
No more «Garbage in, garbage out« but rather a holistic improvement to achieve hard benefits with a combined approach
In a previous article, we have described the advantages of Robotics in terms of rapid time to market and business case (refer to the references below). Why does it make sense to combine RPA with Lean/sixSigma?
With Lean/sixSigma, we are able to address performance gaps and increase the amount of time attributed to customer service. At the same time, we align processes and teams as required. We also take roles & responsibilities into consideration and the type of process (production line/project-driven, etc.). During analysis, we gain an understanding of the application «shortcomings» and the gaps currently being bridged by employees. Those gaps can be closed by applying RPA or other automation technologies.
Many standalone robotic (RPA) implementation we reviewed fall short of an in-depth process analysis and respective process changes. This is especially the case for IT driven projects or automations delivered by RPA pure-play firms without specific industry know-how. By applying Lean and an RPA-implementation jointly, we are usually able to achieve higher benefits than with one approach alone.
Saving with Lean without IT improvements is a start, but certainly not the end of the improvement journey
With Lean, let’s assume we have senior management and employee buy-in, we improved everything along the value-stream. We now face the challenge that the IT-tools are still the same old-fashioned way. Any change will take at least one year – if there is budget for IT changes available. With the support of a robot, we are able to overcome those constraints up to a certain point and are able to deliver the improvements at lower cost and short time to market at the same time.
On the other hand, installing a virtual workforce without improving the process first by Lean or business process reengineering may result in quick reliefs but may also result in a “GIGO” situation where waste has been automated at low costs, but also low value.
Both approaches combined enable us to profit from the scale of a Lean program and its holistic analysis capabilities alongside RPA by bridging technical gaps in existing applications.