lean intro
DESCRIPTION
introduction lo telanTRANSCRIPT
© Operational Excellence Consulting. All rights reserved.
Lean Thinking 101
Eliminate Waste, Create Value
© Operational Excellence Consulting. All rights reserved.
Introduction to Lean Thinking
1
© Operational Excellence Consulting. All rights reserved. 3
What is Lean?
• Value streams or processes • Focused on improving process performance • Clear view of end state
• Wide range of Lean techniques & tools are available
• Learn-by-doing approach • Culture of continuous improvement
• Lean is a management philosophy based on the Toyota Production System (TPS)
• Eliminate everything that does not add value (waste) in the customer’s eyes
Objective
Focus and scope
Approach and tools
© Operational Excellence Consulting. All rights reserved. 4
What Lean IS NOT • Laying off employees by the bus load
• Offshoring or outsourcing
• Delivering less or working harder
• Being mean to people
• Automation or implementing an IT system
• Narrow focus on unit cost management
• Another “extracurricular activities”
© Operational Excellence Consulting. All rights reserved. 5
Lean vs. Traditional Thinking Traditional Thinking § Large batches
§ Low unit costs
§ Work at full capacity
§ Tight schedules
§ High inventories
§ High level of specialization
§ Long cycle times
Lean Thinking § Small batches
§ Total system cost
§ Work at necessary capacity
§ Flexible schedules
§ Low inventories
§ Cross-training
§ Short cycle times
© Operational Excellence Consulting. All rights reserved. 6
Lean Enterprise Framework (a.k.a. Toyota Production System)
Stability
Standardization
Just-In-Time
Jidoka
Involvement
1
2
3
4
5
Stability
Heijunka Standardized Work Kaizen
Just-In-Time
• Continuous flow
• Takt time
• Pull system
• Flexible workforce
Jidoka
• Separate man &
machine work
• Abnormality Identification
• Poka yoke
Goals: highest quality,
lowest cost, shortest lead times
Involvement
1
2
3 4
5
© Operational Excellence Consulting. All rights reserved. 7
Lean Enterprise System • Lean is built on two main pillars:
§ Just-In-Time (Pull System): Delivering only what is needed, when it is needed, and in the amount needed.
§ Jidoka (Quality): The ability to stop the process in the event of problems, e.g. missing information or quality issues. Jidoka helps prevent the passing of defects, helps identify and correct problem areas.
© Operational Excellence Consulting. All rights reserved. 8
What does Lean in manufacturing and process industries look like?
Automotive • Production • Inventory
management
Aerospace • Engine overhaul • Spare parts
Application Common Issues Typical Solutions
• Throughput • Equipment downtime • Rework and re-
inspection • Inventory costs
• Turnaround time • Obsolescence costs
• One-piece Flow/Pull systems
• Equipment reliability • Elimination of defects • Inventory optimization
• Process streamlining • Standardized operating
procedures • Spare parts
management
Process • Materials
management • Asset management
• Material wastages • Equipment availability
• Elimination of defects • Reduction of unplanned
downtime
Source: Operational Excellence Consulting Research
© Operational Excellence Consulting. All rights reserved. 9
What does Lean in a service environment look like?
Banks • Mergers and
acquisitions • Loans application
IT • Outsourced
managed services
Application Common Issues Typical Solutions
• Differences in business practices
• Loans approval process
• Complicated tasks • Unbalanced capacity • Manpower utilization
• Process integration and streamlining
• Fast track processing for low-risk loans
• Segmenting complexity • Pooling resources for
economies of scale • Flexible manpower
systems
Telco • Procurement • Call centre
operations
• Cost-based and capex management
• Customer service
• Inventory management • Network sharing • Channels efficiency
Source: Operational Excellence Consulting Research
© Operational Excellence Consulting. All rights reserved. 10
What does Lean in a service environment look like?
Hospitals • Emergency,
operating room • Resource
management
Application Common Issues Typical Solutions
• “Unpredictable” nature • On-demand service • Highly skilled
surgeons, varied backgrounds
• Historical pattern planning
• Visual management of resources
Airlines • Airport operations • Call centers for
priority travellers
• Unpredictable weather • Network effect • Unique customer
segments
• Weather response SOPs • Customer resolution
based on severity and frequency
Public Services • Social services • Legal services • Funds administration
• Variability in demand by volume and types of services
• Capability building to provide consistent services
• Resource management
Source: Operational Excellence Consulting Research
© Operational Excellence Consulting. All rights reserved. 11
Benefits of Lean Thinking • Improved customer satisfaction (internal and
external) • Improved quality of products/services • Improved productivity • Reduced paperwork • Reduced staff stress (e.g. searching for
information) • Engaged employees
© Operational Excellence Consulting. All rights reserved.
Key Concepts of Lean Thinking
2
© Operational Excellence Consulting. All rights reserved. 13
Methods to Increase Productivity
How to Increase Productivity?
Quantitative Approach
More Staff
More Machines
Work Longer
Qualitative Approach
Work Harder
Eliminate Waste & Simplify
Focus of Lean
Let’s work smarter!
© Operational Excellence Consulting. All rights reserved. 14
What is Value? • Value Added § Any activity that increases the form or function of the
product or service
§ Something the client or customer is willing to pay for
• Non-Value Added (Waste) § Any activity that does not add form or function or is not
necessary
§ No benefit to the client or customer
§ Things not necessary to run the department
© Operational Excellence Consulting. All rights reserved.
“There is nothing so useless as
doing efAiciently that which should not be done at
all.” -‐ Peter Drucker
© Operational Excellence Consulting. All rights reserved. 16
Eight Types of Waste Over-production
Producing more than what the customer needs
Inventory Building and storing extra
services/products the customer has not ordered
Transportation Moving product
from one place to another
Rework Reprocessing, or correcting work
Over-processing Adding excess value when the customer does not require it
Motion Extra physical/mental
motion that doesn’t add value
Intellect Not using employees full intellectual contribution
Waiting Employees waiting for another process or a
machine/tool
Waste
© Operational Excellence Consulting. All rights reserved. 17
Types of Waste
• Creating reports that no one needs or making extra copies
• Exceeding customer needs or requirements (“gold-plating”)
• Exceeding scope of agreement
• Purchasing items before they are needed (e.g. items on sale)
• Providing more information than the customer needs
Over-Production
© Operational Excellence Consulting. All rights reserved. 18
Types of Waste
• E-mails waiting to be read
• Files waiting to be worked on
• Too many office supplies
• Unused records in the database
• Low use to equipment ratios (e.g. photocopiers, printers, etc.)
• Building/storing extra products/ services the customer has not asked for
Excess Inventory
© Operational Excellence Consulting. All rights reserved. 19
Types of Waste
• Waiting to be served
• Waiting for instructions, approvals, information or decisions
• Seeking clarifications (due to unclear communications)
• Equipment/System downtime
• Waiting between assignments or projects
• Out-of-stock
Waiting
© Operational Excellence Consulting. All rights reserved. 20
Types of Waste
• Poor plant/office layouts and workplace organization (5S)
• Insufficient use of tele-/video-conferencing
• Double or triple handling
• Sub-optimal dispatch and routing
• Retrieving or storing files/materials
• Taking files to another person, or going to get signatures
Transportation
© Operational Excellence Consulting. All rights reserved. 21
Types of Waste • Reaching, bending or unnecessary
motion due to poor ergonomics and office layout
• Unnecessary walking to utility room
• Searching for information in internet, intranet or shared folders
• Searching for tools, files and supplies
• Lack of or sub-optimal SOP
• Handling paperwork
Unnecessary Motion
© Operational Excellence Consulting. All rights reserved. 22
Types of Waste • Repeated manual entry of data
• Multiple formats for the same information
• Excessive documentation
• Redundant approvals (checkers checking on other checkers)
• Excessive reporting
• Providing higher quality than is necessary (e.g. color printing)
• Unnecessary part/system replacement
Over-Processing
© Operational Excellence Consulting. All rights reserved. 23
Types of Waste Defects • Data entry errors, mistakes or rework
• Missing information, missed specifications, or lost records
• Poor process controls • Managing subcontractors to correct
mistakes • Incorrect schedules and information • Inadequate trials before full
implementation • Lost or damaged goods
© Operational Excellence Consulting. All rights reserved. 24
Types of Waste Intellect
• Not engaging or listening to employees in finding solutions
• Lack of information or best practice sharing across the organization
• Mismatched work functions with skill sets
© Operational Excellence Consulting. All rights reserved.
“We must always keep in mind that the greatest waste is the waste we don’t see.”
-‐ Shigeo Shingo, a Japanese industrial engineer and expert on the Toyota Production
System
© Operational Excellence Consulting. All rights reserved. 26
Lean Thinking Philosophy
Identify and eliminate all activities that are waste. Focus on optimal flow throughout the process.
Focus on creating value for customers.
Current State
Future State
Identify Waste “True North”
Value Added Time = Lead Time
Full of Waste, Variation, and
Rigidity Eliminate
Waste
© Operational Excellence Consulting. All rights reserved. 27
Lean Principles
1. Specify value from the customer’s perspective
2. Identify the value stream for each service family
3. Make the product/service flow
4. Deliver when the customer pulls from your operations (just in time delivery)
5. Manage towards perfection
Source: Lean Thinking by James P. Womack and Daniel T. Jones
© Operational Excellence Consulting. All rights reserved. 28
Copyrights of all the pictures used in this presentation are held by their respective owners.
© Operational Excellence Consulting. All rights reserved. 29
Other Presentations You May Like…
Check out our presentations catalog at http://www.oeconsulting.com.sg/#!training-presentations/c1les
© Operational Excellence Consulting. All rights reserved.
About Operational Excellence
Consulting
© Operational Excellence Consulting. All rights reserved. 31
About Operational Excellence Consulting • Operational Excellence Consulting is a management
training and consulting firm that assists organizations in improving business performance and effectiveness.
• The firm’s mission is to create business value for organizations through innovative operational excellence management training and consulting solutions.
• OEC takes a unique “beyond the tools” approach to enable clients develop internal capabilities and cultural transformation to achieve sustainable world-class excellence and competitive advantage. For more information, please visit www.oeconsulting.com.sg
© Operational Excellence Consulting. All rights reserved.
www.oeconsulting.com.sg
END OF PRESENTATION For more presentations and guides,
please visit: