0.08 introduction to lean

0.08 INTRODUCTION TO LEAN

2

AGENDA

1. Overview of Lean

2. Lean in the Office Environment

3. Value Streams

4. Flow

5. Pull

6. Barriers to Lean

7. Different ways of implementing Lean efforts

3

�Overview of Lean

Partially based on the book:

“The Complete Lean Enterprise”

Beau Keyte and Drew Locher

4

BASED ON "THE COMPLETE LEAN

ENTERPRISE"

(BOOK BY BEAU KEYTE AND DREW

LOCHER)

�Purpose:

� Introduce Lean concepts

� Introduce value stream mapping

� Develop your ability to "see the waste" and "see the

flow"

� Walk away with an implementation plan with specifics

to drive real results

� Integrate Lean and Six Sigma

“Value Stream Mapping forAdministrative and Office Processes”

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STARTING QUOTES

�“We have observed that our competitors use brilliant people

within broken process and achieve mediocre results. We use

average people in brilliant process and achieve superior

results.”

�“Every minute of lead time on the shop floor is created in the

office.”

�“The most disrespectful way we can treat people is to have

them perform wasteful activities.”

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LEAN THINKING DEFINITION

�Fundamental Objective:

� To create the most value while consuming the fewest

resources

� Define value from the customer’s perspective

� Identify which process steps create value and which

are only waste (muda)

� Work to eliminate the root causes of the waste and

allow for one-piece, continuous flow

“Lean Thinking” by Womack, J.P. and Jones, D.T. (1996)

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RECOMMENDED READINGS

8

BENEFITS

� Lean provides tangible benefits

� Reduces cost not just selling price

• Reduces delivery time, cycle time, set-up time

• Eliminates waste

• Seeks continuous improvement

� Improves quality

� Improves customer ratings and perceptions

� Increases overall customer satisfaction

� Improves employee involvement, morale, and company

culture

� Helps "transform" organisations

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FORD PRODUCTION LEAD TIME 1926

� Monday

� 7:00 PM Ore boat docks at River Rouge plant.

� Tuesday

�10:55 AM Ore reduced to foundry iron 16 hours later.

�12:55 PM Cylinder Block Cast

� 5:05 PM 58 machining operations on casting in 55

minutes

� 6:00 PM Motor assembly takes average of 97 minutes

� 7:45 PM Finished motor loaded on railcars for

assembly plant

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FORD PRODUCTION LEAD TIME 1926

� Wednesday

� 8:00 AM 4-hour assembly time at standardised

assembly plant

�12:00 PM Dealer takes delivery of car

� Conversion of Raw Material to Cash

41 Hours

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LEAN ENTERPRISE

In pursuit of Perfection

You can’t see all the wasteuntil you strip away waste

Define Value and

ID the Value Stream Eliminate the unnecessary

steps in the value stream

Normal vs. Abnormal

VA NVA

Kaizen

As pulled by the Customer

Don’t Automate Waste

“Executive Summary of Lean Thinking” by Womack, J.P. and Jones, D.T. (1996)

Make Value Flow

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RAW MATERIAL

POORSCHEDULING

MACHINE

BREAKDOWN

QUALITY

PROBLEMS

LINEIMBALANCE

ABSENTEEISM

LACK OFHOUSE KEEPING

COMMUNICATION

PROBLEMS LONG

TRANSPORTATION

LONG

SET-UPTIME

VENDOR

DELIVERY

SEA OF INVENTORY

FINISHED PRODUCT

TO CONSUMER

EXPOSE WASTE TO DRIVE IMPROVEMENT

"MAKE PROBLEMS VISIBLE"

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�Lean in the Office Environment




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INDUSTRIES DEPLOYING LEAN SIX

SIGMA IN

THE OFFICE ENVIRONMENT

� Advertising

� Banking

� Computer services &

outsourcing

� Document

management

� Energy services

� Field & technical

services

� Financial services

� Telecommunications

� Construction

� Hotels & hospitality

� Insurance

� Logistics and

distribution services

� Professional services

� Sales & marketing

� Transportation

� Manufacturing

� Healthcare

� Transactional

processes in

manufacturing

• and even Government

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�Value Streams




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VALUE STREAMS

• Quoting

• Order Entry

• Purchasing

• Credit Checks

• Human Resources

• Shipping/Receiving

• Accounts Receivable

• Accounts Payable

• Service & Warranty Support

• Service Industries

• Others?

• Raw Material to Customer – Manufacturing

• Concept to Launch – Engineering

• Order to Cash – Office Functions

Examples of office functions:

“Whenever there is a product (or service) for a customer,

There is a value stream. The challenge lies in seeing it.”(Womack & Jones)

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VALUE STREAM MANAGERS

�Each Value Stream needs a Value Stream Manager

• For product and/or service ownership beyond

function

• Assign responsibility for the future state mapping

and implementing lean value streams to line

managers with the capability to make change

happen across functional and departmental

boundaries.

• Value Stream Managers should make their progress

reports to the top manager on site.

Process 1 Process 2 Process 3

Kaizen

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VALUE STREAM IMPROVEMENT VS.

PROCESS IMPROVEMENT

� Value Stream improvement looks at ALL steps, both value-added and non

value-added, required to complete a product and/ or a service from

beginning to end

� Process improvement typically narrowly looks at improving the value

added processes only without context on the entire system or value

stream

VALUE STREAM

SalesCustomer

ServicePurchasingEngineering

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VALUE STREAM CUT ACROSS FUNCTIONAL

BOUNDARIESValue Delivery Process is not Facilitated by Functionality

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Focusing on the Value Stream Ensures Process Oriented System Thinking

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LEAN ENTERPRISE

�Value Added

Any activity that increases the market form or function of the

product or service. (These are things the customer is willing to pay

for.)

�Non-Value Added (Waste)

Any activity that does not add market form or function or is not

necessary. (These activities should be eliminated, simplified, or

reduced.)

Business Non-Value Added ("Required Waste")

Any activity that is Non-Value Added but is required.

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DEFINING THE VALUE OF AN ACTIVITY

Is the

customer willing

to pay?

Is it done

for the first

time?

Is it a

business

requirement?

Is the good

or service being

transformed?

Non-Value AddedBusiness

Non-Value AddedValue Added

Yes Yes Yes

No No No

No Yes

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THE CONCEPT OF VALUE ADDED

Examples:

• Excessive Walking

• Waiting time

• Paper storage

• Paper sorting

• Correct defects

• Transport

Examples:

• Type in information first time

• Get paper

• Answer customer call

Waste (≈85%)

Value Added (≈3

to 5%)

Business Non-

Value

Added (≈10 to

15%)

Example:

• Satisfying customer Requirement

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8 TYPES OF WASTE – "DOWNTIME"

MANUFACTURING - OFFICE

1. Defects – Correction, errors in documents

2. Overproduction - Doing unnecessary work not requested

3. Waiting for the next process step

4. Non-engaged Employees - Under-utilised employees

5. Transportation - Transport of documents

6. Inventory - Backlog in work queues

7. Motion - Unnecessary motions

8. Extra Processing - Process of getting approvals

� Three New Wastes:

Inappropriate systems, wasted utility resources, wasted materials

back

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DEFECTS - REWORK, CORRECTION, ERROR

IN DOCUMENTS

�Manufacturing

� Rework loops

� Missed process step

� Workers do not

understand job

� Lack of training

� Any part defect

� Missing components

� Out of specification

parts

� Any work requiring re-

work

�Office

� Rework loops (work

arounds)

� Incomplete forms

� Workers who do not

understand forms

� Lack of training

system

� Order entry error

� Purchase Orders not

matching quotation

� Errors – typo’s,

misspelling, wrong

data

� Etc.

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OVERPRODUCTION - DOING UNNECESSARY

WORK

�Manufacturing

� Running any product

that does not have an

immediate customer

demand

�Office

� Working on next

weeks items

� Do easy things first

� Reports not in

unusable form

� Working ahead

� Too many consultants

� Too many reports

� Printing paperwork too

soon

� Etc.

26

WAITING

�Manufacturing

� Unbalanced operations

� Operators idly watch

automated machines

(P.C.’s.)

� Machine downtime

� Long and inconsistent lead

times

� Continual production

schedule fluctuations

� Undisciplined

meetings

� Waiting for

information or

"Expert"

�Office

� Unbalanced functions

� Long and inconsistent

lead times

� Customer demand

fluctuations

� Undisciplined

meetings

� Waiting for information

or "Expert"

� System downtime

� Waiting – for

information, at

meetings, etc.

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NON-ENGAGING EMPLOYEES,

UNUSED PEOPLES SKILLS AND CREATIVITY

�Manufacturing and Office

� Unclear job descriptions

� Unclear expectations

� Un-engaged employees

� Employees without a clear sense of direction

� Ambiguous goals and objectives

� Specialist not utilised in their area

� Etc.

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TRANSPORTATION – TRANSPORT OF

DOCUMENTS

�Manufacturing

� Any movement of

product (i.e.

movement between

departments)

�Office

� Any non-value added

moves of documents

between processes

� Send papers to

archive

� Send physical

documents between

locations

� People travelling

between locations

� Travel to other

locations to get papers

� Movement of

paperwork

� Etc.

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INVENTORY - BACKLOG IN WORK QUEUES

�Manufacturing

� Batch processing

� Forecasting - weekly

schedules

� Work in process

� Finish goods inventory

�Office

� Batch processing

� Weekly schedules

� Consolidation of multi-

site financials

� Full in baskets

� Obsolete

databases/files/folders

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MOTION

�Manufacturing and Office

� Poor workstation configuration

� Poor workstation to workstation configuration

(non cellular)

� Standardised Work not implemented

� Walking to get materials

� Cluttered work areas

� Walking to/from copier

� Poor office layout

� Etc.

Trash

Bench

Parts Rack

Tool

Box

Part

Box

OVEN

Press

Vice

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EXTRA PROCESSING

�Manufacturing

� Any processing not

required by the

customer

� Manufacturing to a

tighter tolerance than

required

�Office

� Standards unknown /

unclear to operators

� Customer specifications

vague or fluctuate

� Output reviewing and re-

reviewing occurs

� Functional departments

have unaligned goals and

poor communication

� Re-entering data

� Too many signature levels

� Unnecessary e-mails

� Etc.

32

CLASS EXERCISE: IDENTIFYING WASTE

� Break into groups

1. WO (Waiting, Overproduction)

2. DM (Defect, Motion)

3. EI (Extra processing, Inventory)

4. NT (Non-engaged Employees, Transportation)

� Brainstorm at least 2 examples of each and list on flip chart

• Factory

• Office

• Warehouse

• Home

• Restaurant

� Present results the class

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�Flow




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CUSTOMER/SUPPLIER CONNECTIONS

CB

Requests through phone, paper, computer, etc.

Responses may travel through several means.

CB

One way to make requests that means only one thing.

35

SIMPLE AND SPECIFIC FLOWS

A C E

FDB

the flow is NOT simple and specific

A C E FB

the flow is simple and specific

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THREE TYPES OF FLOW

1. Is there good WORKER Flow?

2. Is there good MATERIAL Flow?

3. Is there good INFORMATION Flow?

In a office environment more often then not we are dealing with

information flow - What is actual flowing?

• Paperwork

• Electronic documents

• Information bit

• Messages

37

MANUFACTURING FLOW – BEFORE LEAN

�Organisation by machine type with convoluted flow.

�Maximise departmental efficiency and hide problems.

LATHELATHE

LATHELATHE

MILLMILL

MILLMILL

MILL

GRINDER GRINDERGRINDER

500pcs.

750pcs.

DRILL DRILLDRILL

250pcs.

PART FLOW

• Traditional batch and queue

• Lack of value stream systems

thinking

• Very little focus on between the

operations

• Very large inventory

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PART FLOW

MANUFACTURING FLOW – AFTER LEAN

�U-Shaped one-piece flow cell.

�Maximise value stream efficiency and expose problems.

• Batch size of 1

• Value stream approach

• Waste between the operations is

eliminated

• Management of process is very

visual

• Non-standard conditions is very

apparent

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SMALL BATCHES OF WORK

Monday 40 A

Tuesday 10 A, 30 B

Wednesday 20 B 20 C

Thursday 40 C

Friday 20 C, 20 A

Why such a "routine"?

Important:Eliminate all reasons to "batch"!

Discipline to flexible processing!

Monday: 14 A, 10 B, 16 C

Better: Every Type Every Day

Even Better: Every Type Every Hour

7AM: 3A, 2B, 3C

9AM: 4A, 2B, 2C

No Good

40

�Pull




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PULL VS. PUSH SYSTEMS

�Push

� Resources are provided to the consumers based on

forecasts, schedules or "when we get to it."

�Pull

� A method of controlling the flow of resources (people,

information) based on pre-establish rules, and actual

status of the system at any time.

Flow where you can and pull where you must!

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PULL SYSTEMS

� Pull System is a flexible and simple method of

controlling/balancing the flow of resources.

� Eliminate waste of handling, storage, expediting,

obsolescence, rework, excess paperwork.

� Pull System consists of:

• Processing based on actual consumption

• Low and well planned work in process (paperwork)

• Management by sight, improved communication

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PULL SYSTEM EXAMPLES

� Kanban system controlling the flow of product in a plant

� Vendor managed inventories (VMI)

� "FIFO lanes" in offices with established rules to trigger

reallocation of resources

• Check out line at a fast food restaurant

• Phone queue systems

� Print on demand (e.g. reports)

� Paperwork "supermarket" (e.g. sales literature)

� Maintaining a "pool" of human resources (e.g. resume

on file, temporary resources)

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PULL SYSTEM EXAMPLE

03, 3:00PM

1:00PM

10-1-03, 9:00AM

Maximum = 3 orders

Minimum = 1 order

FIFO Rules

1. Process all orders in queue in a first-in-first-

out (FIFO) basis.

2. The "supplying" process should stop when

the maximum allowable number of orders is

reached. The "supplier" can perform other

activities, or can assist the "customer"

process.

3. The supplying process should continue when

the minimum number of orders is reached.

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Barriers to Lean




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CHARACTERISTICS OF OFFICE WORK TODAY

� Positions are based on organisation structure rather than work

flow

� The budget process does not promote systems thinking

� Work flow is trapped in functional silos and delayed by hands off

and approvals

� Each office process has a language all its own foreign to

traditional lean speak

� Resources are not allocated by process deliverables

Functional SilosBudgetOrg Chart

Own set of language that does not have its roots in manufacturing

47

Slide 47

� Different Ways of Implementing Lean Efforts

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IMPLEMENTATION OF LEAN

1. Value Stream Mapping

2. Lean Kaizen Workshop

3. Tool Kaizen

4. On-Going Lean Activity

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1) VALUE STREAM MAPPING

� A Value Stream Mapping effort completed during the

project could occur:

� Over a series of mapping sessions in project team

meetings

� In rapid event where all team members are engaged

for a focused / dedicated time period

• Typically called a Kaizen event, Kaizen blitz or Kaizen

workshop

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2) LEAN KAIZEN WORKSHOP

� The advantages of a Lean Kaizen Workshop are:

� Resources are 100% dedicated during the event

� Drastic results are achieved within a few days

� Excellent method to involve and engage employees

� Train people by applying methods to a real case and

get tangible results

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LAST DAY

SUMMARIZE, PRESENT,

AND CELEBRATE

EVENT SUMMARYGOALS AND RESULTS

DO IT AGAIN!

MAKE THIS THE

NEW STANDARD

REALITY

CHECK

KICK-OFF:

PD/GOALS

REFRESHER

TRAINING

PLAN

COUNTER

MEASURES

TO - DO L IS T

TEAM

LEADER

MEETING WITH

CONSULTANT

DOCUMENT

REALITY

FIRST DAY

We get these

We do these

We measure progresswith these

Goals

Driver Measures

/Event Objectives

Countermeasures

(LM Tools)

ID THE

WASTE

N

S

EW LEAN?

TOOLS

DR

I VE

RS

DRIVER MEA S URE /

CO UNTERMEA S URE

MA TRIX

EVENT WEEK

TO -DO LI S T

TEAM

LEADER

MEETING WITH

CONSULTANT

DAYS 2, 3 OR 4

MAKE CHANGE

REVIEW

PROGRESS

MAKE CHANGE

TO-DO LIST

MAKE CHANGE

TO-DO LIST

REVIEW

PROGRESS

VERIFY

CHANGE

QUANTIFY

RESULTS

T O- DO L IST

TEAM

LEADER

MEETING WITH

CONSULTANT

IF NECESSARY,

EVENT CLOSURE:

VERIFY

CHANGE

QUANTIFY

RESULTS

MAKE THIS THE

NEW

STANDARD

TO-DO LIST

POST EVENT

EVENT EVALUATION

AND FOLLOW-UP

PREWORK

CLASSROOM

TRAINING

SELECT TEAM

EVENT S UMMARYGOALS AND R ESULTS

GO ALS

DR

IVE

RS

G O A L S /

D R IV E R M E A S U R E

MA T R IX

TOOLS

DR

IVE

RS

DR IV E R M EA S U R E /

C O U NT E R M E A S U R E

MA T R IX

PREPARE EVENT

OBJECTIVES

PREPARE

PD

MATRIXES

EVENTTEAM SE LEC TION

D OCUMENTING REALITY

TIME OBS ERVATION

TYPICAL LEAN KAIZEN WORKSHOP

(TYPICAL AGENDA)

52

3) TOOL KAIZEN

� Implementation of Lean principles to very specific process

area in a rapid event.

� Example:

� Office 5S

� Kan-ban system

� Standard Work

� Poka Yoke

� Etc.

Improvements are done locally (within dept or area)

53

4) ON-GOING LEAN ACTIVITY

� Implementation of Lean principles to every day activities.

� Example:

� Inventory level reduction

� Lead-time reduction

� Quality Inspection reduction

� Non-value added operations elimination

� Etc.

0.08 introduction to lean

Documents