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Robotic Process Automation and the 7 Gaps of Lean Philosophy

Robotic Process Automation y las 7 pérdidas de la filosofía Lean
20 October, 2016

Those incapacities of daily life in the office, represent significant costs in companies. RPA (Robotic Process Automation) adds value by sharply reducing these losses.

In a global environment where efficiency and competitiveness are essential, if not critical, the Lean Manufacturing philosophy and tools such as Robotic Process Automation become vital tools allowing us to successfully manage major challenges related to costs, quality, and delivery level of products and services.

Are you wondering what Lean Manufacturing is? Lean (slim, agile) Manufacturing is a simple and effective working methodology that began more than 50 years ago in Japan, with an objective to increase production efficiency in all processes including implementation of the KAISEN philosophy for continuous improvement. The Lean Office concept adapts this model of continuous production improvement to areas of administration and office environments with the same philosophy.

A large percentage of a company’s income statement is related to direct and indirect costs. Applying the Lean philosophy will help find ways to reduce these costs by eliminating waste and inefficiencies in the organization..

According to the INC (Instituto Nacional de Consumo de España), more than 70% of customer claims (internal and external) are caused by problems in the service and management of administrative processes: delays, errors in data entry, loss of documentation, billing errors, communication problems, etc.

In the Lean environment, we understand “waste” as everything that doesn’t contribute to adding value to the customer. Thus, 7 types of “waste” are classified (in Japanese Muda 廃棄物): overproduction, waiting time, transport, excess processing, inventory, movement, and defects. It is considered as the 7+1 waste, the unutilized human potential.

Let’s take a closer look inside each of them:

Losses due to overproduction

The waste due to overproduction is manifested each time a decision is made to do something that has not yet been requested by the client (internal or external) or is produced in an amount greater than required. Developing activities before they are requested or doing them too quickly does not improve efficiency.

Waiting losses

The losses of waiting is revealed every time a person or process does not develop any work, or remains waiting for a subsequent event due to the way the work is organized.

Transport losses

Various transport activities are carried out in one service, both for equipment and people. Often, in an office environment, these activities are underestimated even though workers waste a significant part of their time searching for and transferring materials or documents.

Losses due to Excess processing

The performance of a service in administrative areas usually carries out operations hiding large wastedue to lack of precision of processes, or inadequate technologies and facilities. For example, the inclusion of control phases within a process to check the quality of activities. This control activity, often useless, is included in many phases of the processes, without analyzing the origin of where the problem originated.

Inventory losses

Inventory is identified as anything that is left alone waiting to be used in an activity, whether by people, documents, or materials. If it is not used, no value is added. It is good to relate this waste to the time factor. Time is a valuable resource in service activities.

Movement losses

We often confuse the concept of work with movement. Useful work is a special type of movement that produces value. In the office, moving to the photocopier, looking for a document on a colleague’s desk, taking documents that should be within reach, and movements between applications and computer systems are all quite common examples of movement waste.

Losses due to errors/defects

This waste is evident when activities are performed incorrectly and must, therefore, be repeated or corrected. Non-compliance with the quality standards requested by the client almost always involves financial reimbursement, in addition to compromising the image. This waste is considered the worst of all.

Losses caused by unutilized human potential

Although with some controversy in the world of automation, the wasting of human talent has been considered the eighth waste. This refers to not using the creativity and intelligence of the workforce to eliminate waste and improve the quality of services.

Although Lean concepts have been easily understood and applied in Lean Manufacturing environments, many managers have not understood that the Lean philosophy is a very powerful tool for optimizing any type of business process.

Another pillar of the Lean philosophy is Jidōka (自動化), a Japanese term meaning ‘automation with a human touch’. Aware of its value in naming our platform, we believe that the Lean strategy of continuous improvement in the office should be supported by information systems, alongside Robotic Process Automation (RPA) solutions that will facilitate its implementation and scalability.

With RPA, any well-defined repetitive process using software and applications can be executed by Jidoka software robots, improving workflow, effective communication, and documentation organization. With the aim of developing more agile, efficient, and productive processes that improve the effectiveness of work in teams, and reduce or eliminate drastically the costs of waste  while also improving the level of service provided to customers (internal and final). The number of tasks processed cannot be compared to what a worker can do manually. For example, in the human resources department, software robots can effectively perform, in a matter of seconds, the processing of an infinite number of repetitive tasks involving the use of computer applications and systems, such as work logs, payroll, etc., considerably reducing the rate of errors, waiting times, movements and, at the same time, allowing personnel to be reassigned to more productive and creative tasks.

Today, software robots are being used effectively by companies in various sectors. The first to use this technology is the BPO and Contact Center sector, including several customer management processes (data updating, claims handling, etc.); and in recent years, sectors such as banking and insurance, are finding themselves automizing many of their processes as they face  the era of digital transformation..

It is important to emphasize that its implementation is carried out in weeks and quickly translates into profitability  with a return on investment of over 150% in the first year, with exponential growth following.

Conclusion

The Lean and RPA philosophy complement each other offering great value and excellent return on investment. RPA solves the great challenges of Lean or Six Sigma initiatives making them much more effective without affecting existing information systems or generating large implementation costs. Robotic Process Automation’s Jidoka platform is not just technology, but a tool that takes the Lean philosophy to the next level.

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