LEAN MANAGEMENT

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Introduction It's not necessary to change. Survival is not mandatory.

Why Lean ? The Global economic crisis we find ourselves in has made a crystal clear that

organizations must be willing to change and improve if they have to prosper and in some case survive.

World market is definitely expanding and the need to compete on a global basis

has never been more important.

It doesn't matter where in the world you live or work. Someone is working to do the same job for less money and at better quality.

Because of the tough economic times we find our self's in, our customer are demanding better quality, delivery and lower cost like never before.

Traditional methods of operating our company simply don't work any more. The days of holding massive amount of inventory and taking months to deliver a product that consumer want's in days are long gone.

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Introduction - 2

What is Lean ? Lean is an Operational Excellence strategy that enables you to change

for the better. Lean is the persistence pursuit and elimination of waste/Muda (any

activity done but adds no real value to the product or service).

Things you should know about Lean:

Lean is data driven. Lean is team-based. Lean takes a Systems Approach. Automation shouldn't be the first answer. Lean can be successfully applied in both operations and service

environments. Lean helps in the physical transformation to your processes and

transformation of your organization cultural.

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The Goal of Lean

Improved product Quality, Cost, Delivery; Improved employee Safety and Morale (QCDSM) in any operational or service processes.

1. By establishing• (one-piece) Flow• Based in Takt Time• In a pull environment (JIT)

2. But first I need processes that are:• Stable• Reliable• Predictable• Repeatable

3. I get those processes by establishing:• Awareness at all levels in the organization• 5S - Workplace organization• Value Stream Mapping - information & material flow• Flow - improve plant or office layout• Levelled Production - reduce lot sizes, setup time, lead times, inventory• Standard Work - improve quality & simplify processes

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Lean focus - The 8 wastes

Lean focuses on identifying and eliminating the 8 hidden wastes common to both manufacturing and service industries:

1. Over-Processing: Adding more value to a service or product than customer want or will pay for (e.g. A 15 page report when 1 page would do).

2. Motion: Needless movement of people (hunting, searching, gathering things)

3. Transportation: Unnecessary movement of materials.

4. Excess Inventory: Work-In-Process (WIP) or raw material (RM) that is in excess of what is required to produce Just-In-Time (JIT) for the customer.

5. Waiting: Any delay between when one process step/activity ends and the next step/activity begins.

6. Defects: Any aspect of the product or service that does not confirm to customer needs.

7. Over-Production: Production of service outputs or products beyond what is needed for immediate use.

8. Unused Employee Creativity: Losing time, ideas, skills, improvements and learning opportunities by not engaging or listening to your employees.

Waste in IT6

Waste Element Examples Business Outcome

Defects •Unauthorized system and application changes.•Substandard project execution.

Poor customer service, increased costs.

Overproduction (Overprovisioning)

•Unnecessary delivery of low-value applications and services.

Business and IT misalignment, Increased costs and overheads: energy, data center space, maintenance.

Waiting •Slow application response times.•Manual service escalation procedures.

Lost revenue, poor customer service, reduced productivity.

Non-Value Added Processing •Reporting technology metrics to business managers. Miscommunication.

Transportation •On-site visits to resolve hardware and software issues.•Physical software, security and compliance audits.

Higher capital and operational expenses.

Inventory (Excess) •Server sprawl, underutilized hardware.•Multiple repositories to handle risks and control.•Benched application development teams.

Increased costs: data center, energy; lost productivity.

Motion (Excess) •Fire-fighting repeat problems within the IT infrastructure and applications.

Lost productivity.

Employee Knowledge (Unused)

•Failing to capture ideas/innovation.•Knowledge and experience retention issues.•Employees spend time on repetitive or mundane tasks.

Talent leakage, low job satisfaction, increased support and maintenance

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Typical Causes of Waste

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The Lean Toolbox

5 Why's 5S / Visual Controls A3 Thinking Cellular Manufacturing Change Management Continuous Improvement (Kaizen) Control Chart Critical Chain Capacity Analysis Employee Involvement Flow Cells Metrics and Alignment Mistake Pareto Analysis Prioritization Root Cause Analysis Kanban Systems Takt Time/Cycle Time Spaghetti Chart Standard Work Value Stream Maps

The KNOWLEDGEABLE , EXPERIENCED use of tool is the key to the SUCCESSFUL

use of a tool.

SEIRI – Organisation/Sort out

SEITON – Orderliness/Systemize

SEISO – The Cleaning/Shining

SEIKETSU – STANDARDIZE

SHITSUKE - Sustain/Discipline

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Steps to Achieve Lean

Process Improvements

Waste elimination Identify Waste Identify enablers

Improve Execution Leadership Standard Work (LSW) A3 Approach Daily Standup Calls Gemba

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Leaders Standard Work If we lose sight of people, we lose sight of the very purpose of leadership.

• Actions to be taken each day to focus on processes in each leader’s area of responsibility.

• All about sustainability and accountability built into the practice of daily. weekly. Monthly checks of the actual condition of the Gemba.

• Daily checklist for all leaders.(team leaders, assistant supervisors, supervisors, managers and senior management).

• Clear expectations for what it means to focus on the process.

• Eliminates guess work for team leaders and managers.

• The process is to develop people. This is a great tool built-in to help you coach a mentor. Everyone single leader (president and down) should have a LSW.

• Everyone should have a plan and should know what did they do against their plan actual to expected.

• If you have those elements of auditing, problem solving, focusing on process. You have that built into your schedule, you make it visual, you mentor & coach it. You are a leader in lean and standard work for leaders.

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Leaders Standard Work

Management system to support LEAN:

. Audits

. Problem Solving Methodology (5Whys, A3 etc...)

. Teaching, Coaching, Mentoring

What Lean Leader's Need to Think About:

1. What does Process Focus means?2. What am I supposed to do?3. What’s the difference between lean production system and lean management system?4. What does your typical day look like?5. Are you working in the system or on the system?

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PDCA Management and A3’s

• The A3 is a concrete structure to implement PDCA

management.

• A3 reports are named A3’s because they fit on one

side of an A3-sized sheet of paper.

• Their purpose is to document and show, on one page, the results from the PDCA

cycle.

• The A3 template provides us with a tool that keeps us focused on solving the

right problems, while making our progress (or lack thereof) visible to the team

and the whole organization.

• The A3 template is a guideline for addressing root causes of problems in the

workplace in a rigorous and systematic way.

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A3 Thinking

The mind-set behind the A3 system can be distilled down to seven elements:

1. Logical thinking process

2. Presenting information in a non-judgmental way

3. Results achieved and processes used

4. Using only critical information and visualization

5. Alignment of the effort with strategy/objectives

6. Being consistent throughout the organization

7. A systems approach to problem solving

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Problem-Solving A3

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Problem-Solving A3

Microsoft Office Word Document

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Problem-Solving A3

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Daily Standup Calls

Daily Standup calls ( Tier based)

Discuss KAN BAN Board

Let all team members speak

Surface issues

Based on the outcome, prioritization/re-prioritization need to happen

Reduce WIP

Daily standup meetings – 1 Level above and one Level below

Follow-up

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Gemba

“go and see”

Walk around

Genba (現場 , genba?, also romanized as gemba) is a Japanese term meaning "the real place." Japanese detectives call the crime scene genba, and Japanese TV reporters may refer to themselves as reporting from genba. In business, genba refers to the place where value is created; in manufacturing the genba is the factory floor. It can be any "site" such as a construction site, sales floor or where the service provider interacts directly with the customer.[1

THANK YOU

Terms20

Kaizen (pronounced k ı¯ ´-zen) literally means “change for the better.” It is typically used to denote a short term (one-to-five-day) focused process improvement effort during which a multi-stakeholder project team works full-time on the project, often led by a professional facilitator known as a “sensei.”

DMAIC is an acronym for “Define, Measure, Analyze, Improve and Control” and refers to a systematic five-step approach to running a process improvement project; its origins would be found in early quality programs such as the Plan-Do-Study-Act structure developed by Walter Shewhart in the 1930s.

Pull System – The technique for producing parts at customer demand. Service organizations operate thisway by their very nature. Manufacturers, on the other hand, have historically operated by a Push System,building products to stock (per sales forecast), without firm customer orders.

Kanban – A method for maintaining an orderly flow of material. Kanban cards are used to indicate materialorder points, how much material is needed, from where the material is ordered, and to where it should bedelivered.