Application of lean management

Introduction

With 35 years' experience in China, Knight Frank is a major player in China propertymarket. They provide a wide range of service, including asset management &investment, corporate residential services, property management, acquisitions, sales &leasing, etc. Property Management covers security, maintenance & repair, renovation,etc (Knight Frank China). Currently, Knight Frank China manages over 18 millionsquare feet of owned and leased commercial and residential premises, and their clientsinclude HSBC, Ernst & Young and PricewaterhouseCoopers (Knight Frank China). Interms of Property Management in Shanghai Branch, problems have been identifies inSecurity Management, because the access control, an important part of security, incursunnecessary wastes, gives rise to inefficiency and undermines customers values.Those problems can be solved by lean approach, which aims to improve an operationby eliminating wastes, involving all the relevant people and striving for progressbased on customers' values (Slack, Chambers & Johnston 2007). This essay intends toapply lean management to Knight Frank Shanghai and solve problems existing inProperty Management. Exploring problems at first, the essay introduces a newsolution based on the four principles of lean management. Then it explains theimplementation of the lean solution and analyzes implications of the lean practice.

Issues of Security in Property Management

Employees of companies located in buildings managed by Knight Frank Shanghaihave access to the building by using Access cards at Access Control Systems. But forvisitors, they have to register at the reception desk, putting down their names, the firmthey are visiting and the entry time. Then a safeguard will open the access path forthem. When visitors leave the building, firstly they have to find the information theyregistered as they entered and then write down the exit time. If they leave the buildingand enter again during their visits, they have to repeat the registration process. So, itwastes visitors' time. In addition, if there are lots of visitors coming into the buildingat the same time, they have to queue. In case of that situation, usually there are twoother safeguards at the building hall to keep order, but if there are not so many visitors,they are left idle. What's worse, registration is done by handwriting, so someone ishired to compile data and record them into computers every day. But some visitors'handwriting is unreadable, and information on sheet is harder to keep in comparisonto electronic data; therefore, it is possible that information might be missing.From the whole process of access control, we find that it incurs many wastes andnon-value-added parts. From visitors' perspective, they will get annoyed by theregistration, because it wastes their time, especially when they are in a hurry. FromKnight Frank's perspective, it causes unnecessary costs, because they have to hire atleast three safeguards for the registration and one person for information recording.In order to solve the problem, we apply lean management to Knight Frank Shanghai.

Application of Lean Management

Lean management originates from Toyota Motor Corporation in Japan. It aims to getrid of all waste so that the operation is faster and more reliable, products and servicesare of high quality and the cost can be minimized (Slack, Chambers & Johnston 2007).Lean principles have been increasingly used in many service companies so thatcustomer service can be improved through the elimination of waste (Bowen andYoungdahl 1998). The essence of lean management boils down to the four principles:identify customers' values, eliminate wastes, involve everyone and continuousimprovement (Slack, Chambers & Johnston 2007). Based on lean management, wework out a solution for Knight Frank Shanghai.

Introduction of Lean Access Management

The lean access management is introduced to solve problems of Knight FrankShanghai. When visitors come into the building, what they need to do is use atouch-screen machine in the hall and input visiting details, such as visitor's name,companies to visit and entry time. Then the machine will print out a temporary AccessCard for one day use. So visitors can use the card for entry and exit, and theinformation for each access will be recorded when visitors swipe the card at AccessControl System, and all the data will be transmitted to the computerized securitysystem at Knight Frank Shanghai's back office once visitors register. The informationwill be automatically kept in a data base and Security Management Officers canextract data whenever they want. Moreover, when the visitor put into the visitingdetails, the information flow will also go to the receptionist of the company to bevisited. So the company knows that the person is coming and they can prepare to greetthem at the door. The benefit is more obvious when visitors are influential people.

Lean Philosophy in the New Solution

The Online-Access System is a good reflection of lean philosophy. First of all, itidentifies the customer's value. Visitors understand the importance of securitymanagement, but they hope it would be simple and quick. The Online Access Systemfocuses on customers' needs. It eliminates the old-fashioned handwritten registrationand reduces time throughout the process. In addition, it is extra value for visitorswhen they find out that the receptionist or relevant staff of the company has alreadybeen expecting them.

Secondly, the new solution gets rid of waste. In many different types of operations,seven types of waste have been identified, which are over-production, waiting time,transport, process, inventory, motion and defectives (Slack, Chambers & Johnston2007). However, in a service company, not all the terms used as waste are in line withthat used typically in a manufacture company (Maleyeff 2006). Therefore, JohnMaleyeff (2006) identified seven categories of waste existing in service systems,which include delay, review, mistakes, duplication, movement, processinginefficiencies and resource inefficiencies. Applying this to Online Access System,we'll find that the lean-based solution mainly gets rid of four wastes---delay, mistakes,duplication and resource inefficiencies. Delay means the time wasted in the process,such as that wasted because of waiting or information transmission (Maleyeff 2006).Online Access System shortens time for registration, and there is no need for visitorsto repeat the process if they leave the building for a while and enter again. Also, theydon't have to go to the reception desk to write down their exit time. In addition, byusing the new system, the access information will be sent to the back office oncevisitors register, so it saves the time for information compiling and recording. Thenthe new system minimizes the possibility of mistakes. As previously mentioned,mistakes rising from the old access process is mainly due to unreadable handwritingand human error at information processing. By using the new system, data input, datatransmission and collection are all done by computer; therefore, it increases theaccuracy. The third type of waste is duplication. Duplication refers to the situation thatthe same activity is done more than once in the system (Maleyeff 2006). In the oldaccess system, firstly, visitors have to register all the information on sheets. Thensome staff is responsible for typing those data into computers. So the same data isrecorded in different places twice. Resource inefficiencies means that personnel,capital or materials are not fully capitalized or they are wasteful and unnecessary inthe system. Reflecting in the old process, resource inefficiencies mainly refers to thewaste of employees. There are two safeguards at the hall to keep order, one safeguardto open access path for visitors and at least one employee to type information intocomputers. In addition, the old process wastes paper sheets for registration. Using thenew process, whereas, we can eliminate the three safeguards at the hall. Thereceptionist will greet visitors and tell them what to do. And there is guidance on thetouch screen if visitors don't have any idea about how to use the registration machine.Then, there is no need to have the post for information recording, because the systemcan record, transmit and keep data automatically and accurately. Thanks to thecomputerized process, all the registration is done electronically, which saves papersheets. As a result, the lean-based process gets rid of various types of wastes andenhances speed and efficiency.

Thirdly, the new process involves visitors, receptionist, employees at the visitedcompanies and safeguards. Visitors need to fill all the compulsory blanks of theelectronic registration forms. Receptionist has to be multi-skilled. Rather than onlystand there and greet, they also need to deal with inquiries and guide visitors. Sincethe access details will be accordingly sent to companies visited, relevant employeesworking for the company will also be involved. They will be expecting visitors and beprepared to greet them at the door if possible. Finally, Knight Frank Shanghai cantrain safeguards more skills, so that they will be more capable to deal with safetyrelated tasks, such as emergencies.

Lastly, Knight Frank Shanghai strives for continuous improvement by using the leanaccess system. Taking advantage of smooth information flow, Knight Frank Shanghaibetter serve tenants and visitors, and they will be able to manage the security of thebuilding more efficiently.

Implementation of Lean Access System

Successful implementation of the lean access system calls for the efforts from variousaspects.

5-S plays an important role. It includes sort, straighten, shine, standardize and sustain(Slack, Chambers & Johnston 2007). First of all, Knight Frank Shanghai has toeliminate unneeded safeguards that used to be responsible for registration anddelegate new tasks to them (Sort). Then they have to position the RegistrationTerminals at noticeable places in the building hall and use clear signs to guide visitorsthere, so that it can reduce the workload of receptionist (Straighten). Apart from that,the guidance about how to use the machine should be clear and simple, so that visitorscan quickly follow it and fill the Registration Form and get Access Card as soon aspossible (Shine). The Registration Form should be designed neatly and uniformly,only including necessary parts (Standardize). Finally, employees should beencouraged to follow the new process continuously and the benefits of using the leanpractice should be highlighted and promoted, so as to develop the commitment andpride throughout Knight Frank Shanghai and all the tenants in commercial buildings(Sustain).

Jidoka is also significant for successfully implementing the new solution. Jidoka is apractice for implementing quality at the source, which aims to detect errors in time(Krajewski, Ritzman & Malhotra 2007). Though we can minimize human error byusing computerized process, the system also have abnormal conditions and even breakdown sometimes. Therefore, operators should carry out inspections to identify theoccurrence of abnormal signals so as to keep the smooth flow of information andconsistent performance of the system and prevent the occurrence of mistakes finally.Besides, it is necessary for Knight Frank Shanghai to adopt basic working practices inorder to implement the new solution. They have to work out disciplines aboutimplementing the new access system, so that employees engaged in the process canfollow it, which helps improve the quality of security service. Then, Knight FrankShanghai should be devoted to develop its employees and build trust in them. Thecompany can provide sufficient trainings to employees, so that they can take moreresponsibilities. For example, safeguards who used to keep order and open access pathat the hall can be delegated the power to help tenants deal with safety-related issues,and system operators should be trained to detect errors in time and be authorized forsystem maintenance. Thus, it can develop staff's decision-making abilities, improvetheir sense of responsibility and encourage them to be more committed to thecompany.

Implications of Implementing Lean Access System

Lean Access System helps Knight Frank Shanghai achieve the five performanceobjectives mentioned by Nigel Slack (2007). First, it increases the speed of securitymanagement. Time is saves during the registration process; meanwhile necessaryaccess details are recorded. In addition, information processing at the back office isquicker and more convenient. Then, it improves quality of security management. Thecomputerized system increases accuracy of information and guarantees the saving of acomplete set of data. Based on the improved quality, Knight Frank Shanghai canprovide more dependable security service, because the data is keep well and they canextract it at any time when issues happen. In terms of flexibility, thanks to the newsystem, extraction of registration information can be done at any time. In addition,Knight Frank Shanghai provides pre-notified service to its tenants once their visitorsregister at the machine. As for cost, Knight Frank Shanghai has to use severalregistration machines, the number of which is estimated according to the number ofvisitors per day. It incurs expense for the company, but on the one hand, thosemachines can be used for a long time and their cost can be spread throughoutmachines' life time; on the other hand, it saves money by minimizing the number ofemployees involved in the registration process. As a result, taking a long-termperspective, it lowers cost for the company.

Apart from the five performance objectives, the lean access process will delightvisitors and makes security management more professional and effective. Though it isonly a small part of Knight Frank Shanghai's property management, it helps buildpositive image of the company, and attracts more tenants, which will generate moreprofits.

Conclusion

The lean access system is introduced to help solve the problems in Knight FrankShanghai's security management, an important part of property management incommercial buildings. The solution incorporates the four principles of leanmanagement. It is designed to meet visitors' demand of quick access; it ischaracterized by full involvement of employees, visitors and other relevant people; iteliminates four major wastes existing in service companies---delay, mistakes,duplication and resource inefficiencies and the lean solution encourages Knight FrankShanghai to make continuous improvements. In order to achieve successfulimplementation of the lean practice, the company is required to carry out 5-Sapproach. Jidoka, the error detection process, also need to be implemented so as toensure the consistent performance of the whole process. In addition, the company hasto follow basic working practice and gain employees' support to fully carry out thewhole process. Lean access system contributes to Knight Frank Shanghai's fulfillmentof the five performance objectives---speed, quality, dependability, flexibility and cost,and is also conducive for the company to build its brand. Therefore, applying leanmanagement to the company is feasible and worthwhile.

Reference

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• Knight Frank China. [Online]. (http://www.knightfrank.com.cn). (Accessed 29 Dec 2009)
• Krajewski, LJ., Ritzman, LP. and Malhotra, MK. (2007). Operations Management Processes and Value Chains. 8th ed. New Jersey: Pearson Prentice Hall.
• Maleyeff, J. (2006). Exploration of Internal Service Systems Using Lean Principles. Management Decision, Vol.44 (No.5), pp. 674-689.
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