Differences Between Manufacturing and Transactional Processes in Lean

One of the great things about lean methodologies is that they recognize a distinct difference between manufacturing and transactional processes. Whereas some other methodologies see the two as two versions of the same thing, often differentiating them just by the discrete or continuous nature in which their data is collected, lean aims to provide an organization and its leaders with the necessary tools to work separately in both areas.

What is the difference between manufacturing and transactional processes in lean, and what unique features must a leader recognize when working with both concepts? It’s not difficult to summarize both concepts, so let’s have a look at what separates them as well as what brings them close.

Differences

When dealing with a transactional process, you typically have a small number of actors responsible for carrying it out. On the other hand, manufacturing processes may involve a large number of individuals and go through multiple required steps that transform the input completely.

This also affects the way data is collected in both cases, as a manufacturing process clearly requires continuous measurements while a transactional environment would need discrete ones. There is some overlap in the way measurements are carried out, but for the most part you’ll find yourself sticking to these two main points.

There’s also a major difference in the way processes are described in both environments. Manufacturing processes are typically much more strictly defined, with a step-by-step set of instructions that have to be carried out in some precise manner. This is rarely the case with transactional processes, which can be much more flexible and open to interpretation. As you’re probably guessing, this also inevitably affects the error rate in those processes, requiring a more careful approach in carrying them out and controlling their results in some environments.

Similarities

There are also plenty of similarities between the two areas, and it’s no surprise that some people confuse them and consider them as the same thing in some cases. It’s important to understand that transactional and manufacturing processes can have a significant overlap in some organizations and the way they carry out their work, and in some situations the difference may be only marginal and not really worth making a distinction.

This is sometimes the case in the IT world, especially when it comes to software production. The way some teams structure their work reveals a significant overlap between manufacturing and transactional processes in their work. That’s not a problem though, so don’t see it as a situation to be avoided it’s just inherent to the way certain types of organizations work and it only means that they have to adjust their work to this overlap.

More importantly, in those cases it’s crucial to ensure that the measurement processes used by the organization are aligned with the situation. As we mentioned above, in most cases you’ll need to collect data from manufacturing processes in a continuous way and from transactional ones in discrete steps, so when there is an overlap between the two, you’ll want to make sure that you don’t end up with the wrong kinds of data sets.

Conclusion

Lean allows you to work easily with both transactional as well as manufacturing processes, no matter what your organization’s work style is like and what industry you’re in. It’s important to understand the differences between the two as best as possible, as otherwise you will not be able to make proper use of the tools lean provides you with for dealing with these processes and measuring their output correctly. If you do apply the relevant principles properly, you can see a significant improvement in the performance of your organization once you’ve started collecting and organizing data.