Lean: The core idea is to maximise customer value while minimising waste. Simply Lean means creating more value for customers with less resources.
After the financial crisis of 2008 – 2012 companies all over the world have been looking for new ways to streamline their processes. Lean and all of its accompanying methodologies has become a holy grail for many different organisations as they endeavour to drive down costs and improve efficiency. However, Lean is not the only methodology out there. Another methodology that increasing numbers of organisations are looking at adopting is that of marginal gains. This works on the principle that a series of small changes can be aggregated to produce much more significant changes.
Why could Marginal Gains be an option?
If production costs are too high in a manufacturing company and savings need to be made of 10% over the following year an option could be to reduce the workforce (and thus reduce staffing costs) to produce the necessary savings. The consequences of such an action could nevertheless be catastrophic as an adverse result of such an action could be a reduction of production capacity and a loss of sales. So in effect what really happens is that the company is downsized.
Marginal Gains: The doctrine of Marginal Gains is all about making small incremental improvements in any process that leads to a significant improvement when added together.
A far better approach would be to search for Marginal Gains to achieve the required savings. Rather than looking for a single large cost saving or efficiency improvement the implementation of a larger number of small measures, where each of which has a minimal effect but combine to have a large cumulative effect is less likely to have a negative impact on the company as any introduced change is spread across the whole organisation.
Case Study: Revolution in Team GB Cycling.
Until relatively recently Team GB were considered to be also-rans in world cycling as their performances could be described at best as average. Yet Team GB has since become the leading team in world cycling. In the last two Olympics, Team GB has won 16 gold medals and furthermore British riders have also won the Tour De France three times in the last four years.
So what has led to this remarkable turnaround?
When Sir Dave Brailsford became performance director of British Cycling, he set about breaking down the objective of winning races into its component parts as he believed that if it was possible to make a 1% improvement in a number of areas, the cumulative gains would end up being hugely significant. Thus he started to focus on a range of weaknesses and began to look at ways in which he could improve each of them. He did not view each weakness as a threat, but as an opportunity to make adaptations, and create marginal gains.
Under his tenure some notable changes were made
- Wind tunnel experiments showed that the bike was not sufficiently aerodynamic and it was discovered that this was because dust was accumulating on the floor and undermining bike maintenance. So he had the floor painted pristine white, in order to spot any impurities.
- The team started to use antibacterial hand gel to cut down on infections.
- At Team Sky, he redesigned the team bus to improve comfort and recuperation.
- Research was carried out on untested assumptions, such as the dynamic relationship between the intensity of the warm-down and speed of recovery.
As the team learned more, further marginal gains were made which rapidly began to accumulate. It could be argued that although the incremental changes he introduced made a huge difference his most significant contribution was his questioning mindset and a commitment to continuous improvement, which meant a fundamental dissatisfaction with the status quo.
© Horton, R. (2015) Omega Support Services.
Case study based on information found on the BBC Website.
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Read the article on the left before answering the following questions.
1. What does streamline mean?
2. What does the author mean by a holy grail?
3. What is meant by aggregated?
4. What is an adverse result?
5. What is a large cumulative effect?
6. Explain what is meant by also-ran.
7. What is a tenure?
8. Explain what is meant by undermine.
9. What does pristine mean?
10. What are incremental changes?
1. Explain in your own words what is meant by the principle of Marginal Gains. Use the Aggregation of Marginal Gains graphic in the main text to help explain your answer.
2. How effective do you think this principle could be? Give an example.
3. In what context(s) would this principle be ineffective?
4. In what ways could this principle be used to improve your working environment.
Think about the answer you gave to Speaking Question 4 above. Write a short report of 250 words based on the original answer you gave. The report should contain information on the area(s) which could be improved, and then your recommendations. Also include an action plan on how these small changes could be implemented within your working environment.
Although this writing assignment is optional you will get more out of your English lessons by completing it.
* You need to prepare these questions for conversation during your next online / face-to-face session with your tutor.