LEAN ADMINISTRATION
Administrative functions like government processes, finance, human resources, regional, international and global procurement, IT and other non-manufacturing support units (in accounting grouped under SG&A) make up a common set of processes necessary to meet the organisation’s goals. Depending on the industry, they also represent more than 50% of all costs related to meeting customer demand. However, from a customer perspective, as much as 75% - 90% of all activities performed by these functions do not add value. In addition, the outputs of administrative functions often overlap each other and are not clear or easily quantifiable. For this reason, this group of expenses is often referred to as a “black box” and neglected for improvement initiatives.