Sunday, September 7, 2014

Lean Manufacturing Techniques for Non-Profit Operations

The systems approach to lean manufacturing techniques, with a standardized approach and clear set of efficient processes, is an excellent model to base non-profit operations. Southwestern Pennsylvania has one of the largest groupings of non-profits per capita than any other region in the United States. Because of this overall large population, local foundations (many times the bread and butter of many of these non-profits) are tightening grant-making purses and mandating specific goals, outcomes, etc, in their grant contracts. Rather than overhauling desired projects to fit the demands of funders, I believe that significant changes can be made in the process approach that some non-profits take to their business. Overall, the more that a non-profit organization looks and acts like a business, generally the better it will fare in funding troughs.

The lean methodology instated by Toyota, and incomparably copied by many other manufacturing companies, has the ability to eliminate “waste” in both time and energy in order to produce a better product, cheaper. This same type of methodology can be adopted by a non-profit, eliminated wasted time and enhancing client experience.

Lets take a social service non-profit, or any organization that provides a direct service, as an example. Social service organizations operate similarly to hospitals, so significant comparisons can be drawn to the Seattle Children’s Hospital and their systems approach. UPMC also operates in a similar way in regards to the time mandated for patient visits. If a company wants to serve its client as efficiently as possible, what are some of the processes that can be incorporated to assist an organization operationalize the cost-saving measures that could keep the non-profit in business?

According to the white paper “Integrating Lean Management Principles in Nonprofit Organizations”, there are significant ways that each step of a social service non-profit ladder can parallel a lean manufacturing model. Generally, the process begins with the client completing the intake process. Next the client receives some sort of service (education attained, food stamps provided, etc). Lastly, the client exists the program. The white paper focuses on the intake process. Ways in which to minimize waste include implementing a set process with steps of how to collect information and understand the client’s needs. This includes duplication of effort and smooth flows of information gathering. Looking at the number of individuals who are involved in this process is also important. How many workers does the client come into contact with in order to enter into the desired program or access necessary services? Minimizing the number of individuals involved and eliminating repetition can better serve the client. All intake workers should also have access to the same information and skills, so that there is no difference between Intake worker A and Intake worker B in their assistance to the client.

This is a small change, but reflects the same principle as the Toyota Company employs in regards to their highly specified sequential process. As social service organizations work directly with individuals, they have a person-to-person connection with the client that must be maintained throughout the process. Streamlining of processes allows the same necessary information to be gathered, and ensures that each client is treated the same. Making sure that Client A receives the same service as Client B is incredibly important to the overall utility of the process and will lead to a stronger case management system.

Though simplified, this understanding of lean techniques can greatly enhance the fundability and process management of service non-profits. It is my belief that if non-profits implemented overhaul of their service process, some jobs would be lost do to inefficiencies in the system, but the overall client experience would be greatly enhanced, leading to better outreach and greater funding possibilities. I’ve written about a very small piece of the non-profit framework that can be utilized for greater efficiency of process. Looking at other non-profits, like environmental organizations, how would their operations be changed by the streamlining of processes shown by the Toyota model? If there isn’t a clear process of work, can lean manufacturing techniques be applied to differing non-profit models to enhance efficiency?



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