Lean Office
Training YOU to Recreate Your
World
Course Agenda
»
Lean office overview
»
Definition of waste
»
Orientation to YESCO Hawaii
»
Round one of simulation
»
Value Stream Mapping (current state)
»
Implementing lean tools
»
Round two of simulation
»
Value Stream Mapping (future state)
»
Round three final simulation
»
Final Evaluation
2
Introductions
»
»
»
»
Who are you?
Where are you from?
What do you want to learn today?
?’s
3
What is Lean Office?
Lean Office is a systematic
approach applied to the value
chain with an aim to streamline
the business processes by:
» Eliminating waste
» Utilizing lean techniques
» Resulting in: Lead time
reduction and Productivity
improvement
4
Why Lean Office?
“In America today we have good people
working in poor processes. What we want
is good people working in great processes”
Michael Hammer
5
Why Lean Office?
“ Toyota Production System will not work unless it
is used as an overall management system. TPS
is not something that can only be used on the
Production floor.”
Taiichi Ohno
6
Lean Office
LEAD TIME REDUCTION
7
Waste Elimination
Business as Usual
Customer
Customer
Waste
Contact
Delivery
Lead-Time
Lean Systems
“Eliminate Non-Value Added Activities”
Customer
Customer
Contact
Delivery
Lead-Time
(Shorter)
8
Value Added vs. Non-Value Added Activities
» Value Added (VA)
– The customer is willing to pay for it
– Physically transforms the product (or
document or information)
– Is done right the first time
» Non-value Added (NVA)
– Consumes resources, but does not add value
to the product or service
» Necessary Non-value Added (N-NVA)
– Does not add value to the product or service
but are
– CURRENTLY NECESSARY
–
–
–
–
Customer Contract or specification
QS 9000 or customer standard
Government regulation
Current state-of-the-art work method or
technology
9
Why Lean Office?
» Only 30% of the total
costs are directly
manufacturing
» Where is the rest of
the money being
spent?
10
Lean Organization
Process View
Customer
Business Operations
Delight
A streamlined flow of goods or services through an organization in concert
with customer demand and requirements
We can begin to reduce the complexity
of an organization by implementing
Lean Tools and Techniques in support
processes. We can gain a competitive
advantage by streamlining the
organization, focusing on these four
areas
Streamline,
Synchronize, and
Integrate
1) Identify, manage or break the constraints
2) Eliminate waste and non value added work
3) Synchronize all activities toward customer
delight
4) Apply an employee based cross functional
continuous improvement plan
11
Business Activities
12
Sites of Waste
» Policies
– Organizational structure
– Management policies and methods
» Macroscopic wastes
– Supply chain
– Office layout
» Major wastes
– Process and cell level
» Microscopic wastes
– Operator and computer level
13
Lean = Eliminating the Waste
Value Added
Defects
Overproduction
Waiting
Non-utilized talent
Transportation
Inventory
Motion
Extra processing
Typically 95% of Total Lead Time is Non-Value Added!!!
©2006 MMTC
14
Waste of Defects
» Money and time wasted to find
and fix mistakes
» Lack of process controls
» Poor work instructions
» Inadequate training
» Data entry error
» Missing information
» Missed specifications
» Pricing error
15
Waste of Overproduction
»
»
»
»
»
»
Making multiple schedules due to system incompatibilities
E-mails/memos to everyone
Printing extra documents just-in-case
More information than the process requires
More information than the customer needs
Creating reports no one reads
16
Waste of Waiting
»
»
»
»
»
»
»
»
Time lost when people and resources are waiting:
Unbalanced workload
Equipment break downs
Batch processing
Waiting for information
Waiting for copiers/faxes
Waiting for customer response
Waiting for an internal response
17
Waiting Waste
©2006 MMTC
18
Waste of Non-Utilized Talent
»
»
»
»
Unclear job descriptions
Lack of training
Lack of synergy and collaboration
No feedback loop for continuous
improvement
» Suggestions for improvements that are
not investigated/utilized
19
Waste of Non-Utilized Talent
20
Waste of Transportation
» Poor office layout
» Walking around to correct mistakes and
find answers
» Retrieving or storing files
» Carrying documents to and from shared
equipment
» Going to get signatures
» Taking files to another person
21
Waste of Inventory
»
»
»
»
»
»
»
Storing of obsolete prints and specs
Obsolete databases/files and folders
Files pile up between work desks
Open projects (WIP)
Office supplies
E-mails waiting to be read
Unused records in a database
22
Inventory Waste
23
Waste of Motion
» Looking for items because they are out
of place
» Mis- or unfiled papers
» Saving files everywhere
» Handling paperwork that could be
electronic
» Extra clicks or keystrokes
» Working around other open files on desk
24
Waste of Extra Processing
» Doing more than is required to meet
customer requirements
» Unnecessary paperwork
» Redundant approvals
» Repeated manual entry of data
» Use of outdated standard forms
» Use of inappropriate software
» Creating hard copies of reports
25
Above the Shop Floor…
This pile
represents
over a
dozen jobs.
How many
labor hours
to produce
this paper?
Office Simulation
Let’s learn by doing!
28
YESCO Hawaii
A New Division
29
YESCO Hawaii Orientation
» You are all employees of YESCO Hawaii
» Positions to be filled:
- Sales
- Business Office
- Engineering
- Material Control
- Scheduling
- Production/Installation
- Process Engineer
» We will work in batches of 5 at Sales and 1
everywhere else
» We will measure the following
- # of orders shipped
- # of invoices faxed
- # of quote drawings completed
- Work in process
30
YESCO Hawaii – Company Policies
» Work shift is 10 minutes
» Keep busy at all times
» The goal is to Install and invoice 14 orders and complete 3
new business quotes
31
YESCO Hawaii
Round 1
32
Metrics Scorecard
Measures
Lead Time
Work-In-Process
Orders Shipped/Installed
Drawings Quoted
Invoiced $s
Material Costs
Labor Costs
Overhead Fixed Costs ($5,000)
Total Cost
Total Revenue
Profit / Loss Totals
Team 1 Team 2 Team 1 Team 2 Team 1 Team 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
33
YESCO Hawaii
Round 2
Make some improvements!
34
Metrics Scorecard
Measures
Lead Time
Work-In-Process
Orders Shipped/Installed
Drawings Quoted
Invoiced $s
Material Costs
Labor Costs
Overhead Fixed Costs ($5,000)
Total Cost
Total Revenue
Profit / Loss Totals
Team 1 Team 2 Team 1 Team 2 Team 1 Team 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
35
LET’S GET LEAN
Learn the tools to recreate
your WORLD
36
DVD
Its all about
Time
37
Characteristics of a Lean Process
1. People arranged in process order
2. One-piece flow processes
3. Ergonomically-correct work areas
4. Pull system discipline
5. “Standard operations” defined and implemented
6. Cross-functional, multi-process associates
7. Process intolerant of abnormalities
38
7 Steps for Value Stream Mapping with Swim
Lanes
1.
2.
3.
4.
5.
6.
7.
Create a macro level flow of process
Select a functional area to map
Detail the steps
Identify NVA and N-NVA steps
Analyze the process
Develop a future map
Develop and implement action plan
39
1. Create Flow of Process
stream
Break up departments into “swim lanes”
“YESCO Hawaii” Value Stream Map of business process
Scheduling
Material Control
Business Office
Sales
Swim Lane border
(divides departments)
©2006 MMTC
41
3. Detail the Steps
Process Mapping Guidelines
• Gather the information from the actual process - “go
see” where the work is being performed
• Get the real data versus the theoretical way it should
be done or the way people “think” it is done
• Use the “experts” (people doing the work) to develop
the maps
• Use the maps as a microscope on the process to allow
you to see where to make improvements
43
Use the Experts…
44
Explanation of Flow
Diagram Symbols & Colors
D
O
Describe
the process
step
W
Color in:
Value Added
Non-Value Added
Necessary Non-Value Added
N
T
I
M
E
If the step is
Non-Value
Added, which
DOWNTIME
waste(s) does it
represent?
What is the
walk/travel
distance?
How much time does
it take to complete the
process step?
45
Explanation of Flow
Diagram Symbols & Colors
I
Represents “Inventory”
46
Explanation of Flow
Diagram Symbols & Colors
Yes or
No?
Represents a “Decision”
47
Explanation of Flow
Diagram Symbols & Colors
Connects a process
within a swim lane
48
Explanation of Flow
Diagram Symbols & Colors
Connects steps that cross
swim lanes
49
Explanation of Flow
Colors
Diagram Symbols &
Represents electronic
work/data transmission
50
Explanation of Flow
Diagram Symbols & Colors
RAI
Represents document Reviews,
Approvals or Inspections (RAI)
51
4. Identify NVA & N-NVA Steps
N-NVA
NVA
VA
Examples of NVA Activities
» Traveling (excess transportation or motion of
people or materials)
» Inspecting or checking (review-approvalauthorization cycles)
» Work reporting (“done right the first time” rule)
» Redundant or unnecessary data entry
» Supervising
» Counting
» Reformatting or creating duplicate copies
» Filing and file maintenance
53
5. Analyze the Value Stream
Map
1. Total each of the different process events
Value
Added
Non
Value
Added
Non Value
Added
Necessary
Delay
Approve
or Inspect Hand Off
Inventory
Totals
Time
Steps
54
5. Analyze the Value Stream Map (using
Starbursts)
NOTE: Paste a bright green post-it near improvement
opportunities that you have identified from you current state
value stream map. Write a small description of the waste
and how to fix it.
STARBURST
5. Analyze the Process Map
2. Identify opportunities to combine steps that occur between two or
more people
•
In order to eliminate handoffs or delays
3. Identify opportunities to perform work simultaneously instead of
sequentially
•
In “parallel” instead of “serially”. What is the earliest a
particular work step can occur?
•
Identify opportunities where work (documents or information)
can be delivered to the next person or operation one piece at
a time instead of delivering work in a “Batch”
•
Identify opportunities to build into the process signals or
advanced notice to downstream departments to prepare to
receive or produce work
56
Parallel vs. Serial Processing
57
5. Analyze the Process Map
4. Identify opportunities to “co-locate” people doing work:
•
To improve communication
•
To reduce the effects of handoffs and of transportation
distances.
5. Identify opportunities to automate any of the work
•
Electronically capture and transmit documents (scan-mail)
–
•
Electronically capture and report process events and work
status
–
•
Replace manual handoff with an electronic handoff
Replace hard copy forms, worksheets, or spreadsheets with
electronic versions, accessible from the network
Electronically combine several documents into a single
database
58
5. Analyze the Process Map
6. Identify problems which if solved will reduce time or error rate
7. Determine whether the entire process is a candidate for
“reengineering”
59
6.
Develop Future Map
Now that opportunities for improvement have
been identified through the analysis step, start a
new map incorporating the improvements you
identified. Remember to take a picture of your
before and after states.
60
7. Develop & Implement Action Plan
»
Create a list of actions
»
Prioritize the list – Impact-Difficulty Grid
»
Assign responsibility
»
Define due dates
61
Impact/Difficulty Matrix
Difficulty
Easy
Hard
Impact
High
Low
62
Sustaining Improvements
» Recognize that several follow-up activities may be necessary:
– Implementing and refining a measurement or performance monitoring
system
– Initiating additional improvements or corrections based on the
measured results of the improved process
» Reconvene Team representatives until the projected levels of
improvement have been achieved and sustained for at least
three months
63
Exercise – Map the process!
Exercise
64
Symbols & Colors for Process Mapping
Process
Step
Same
Person
Step
Between
Process Step
I
RAI
Inventory
Decision
Review, Approve
Inspect
65
Lean Tools
Fill up your Tool Box!
66
Takt Time is the pace needed
to meet customer demand.
If you have a Takt Time of two minutes, that
Establishing
Takt
Time the process is
means
every two
minutes
completed once.
Every two hours, two days or two weeks,
whatever your sell rate (customer demand)
is your Takt Time.
Takt Time =
Your Operating Time per Shift
Customer Requirement per Shift
GOAL: Produce
= 60 sec to Demand!
27,600 sec (7.67 hours)
460 orders
67
5S & Visual Management
• A proven method used to systematically
organize, clean, and standardize the
workplace
If you can’t do 5S,
you can’t do Lean!
68
5S & Visual Management
Seiri
Saiton
Sort
Set-In-Order
Clear out Configure
Seiso
Seiketsu
Shitsuke
Shine Standardize Sustain
Clean
Conformity Custom
69
Elements of a 5S Program
•
•
•
•
•
Sort - what is not needed, sort through, then sort out; “When in
doubt, throw it out!”
Set-in-order - what must be kept; make visible and self-explanatory
so everyone knows where everything goes
Shine - everything that remains. Clean equipment, tools and
workplace
Standardize - implement best practices to keep the workplace
clean and organize
Sustain - making a habit of properly maintaining correct procedures
70
What is Standardized Work?
•
Standardized Work is a method enabling employees to improve their
control of operations and measure their performance against
documented standards
•
Performance is optimized by reducing variation and waste in
operations by the efficient arrangement of people, products, and
machines, thus improving product quality
71
Cellular / Flow Processing
•
•
Arrange people and workspace to achieve one-piece flow
Minimizes wastes of:
• Defects
• Transportation
• Overproduction
• Inventory
• Waiting
• Motion
• Non-utilized Talent
• Extra Processing

Single piece flow

Pull process control

Reduced waste

Improved floor space
72
One Piece Flow
Consider these conditions for “flow” in the office
setting:
1. One piece processing versus “batch”
2. People in process sequence
3. Multi-process work
sequence
4. Multi-process skilled
people
5. Synchronization of
operations (work balance)
73
Poka-Yoke / Mistake-Proofing
Poka-Yoke is the
removal of all
potential causes of
error either
through design,
process, or
mistake-proofing
devices, to ensure
consistent process
results
Poka-Yoke helps build quality into processes to
achieve “Zero Defects”
74
Kaizen
• Kai = Change
• Zen = Good (for the better)
• Kaizen = Continuous Improvement
Kaizen has a bias for action!
75
Yesco Hawaii
Round 3
Remember to think
outside the box!
76
Metrics Scorecard
Measures
Lead Time
Work-In-Process
Orders Shipped/Installed
Drawings Quoted
Invoiced $s
Material Costs
Labor Costs
Overhead Fixed Costs ($5,000)
Total Cost
Total Revenue
Profit / Loss Totals
Team 1 Team 2 Team 1 Team 2 Team 1 Team 2
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
77
Customer Service
Request – IT Provider
Old Process – Average 50 days
Define
Customer
New Process - Average 7 days
Waste removed
Service Rep
order
defines order
Customer
Mgr verifies
Customer Service
Admin inputs
order
Prepares form
To data base
Service Rep
Mgr approves
Quote
No
quote
Yes
Needed?
Mgr approves
Purchasing
quote
quotes order
Admin inputs
to data base
Quote above
No
$8,000?
Mgr
approval
Admin sends
Purchasing fills
Approval notice
order
Yes
Mgt Board
Purchasing fills
approval
order
Account VP
Order processing
approval
Receives and
Order processing
Signs off
Receives and
Signs off
78
YESCO Las Vegas Success Story
» The business office has reduced
Node 5 (last day of labor to date of
invoice) from an average of 15 to 20
days to 5 to 12 days for the Exteriors
Branch.
» The same concepts are being used to
streamline the billing process for
Interiors eliminating several hand offs
and reducing Node 5 as well.
79
YESCO Electronics Success Story…
80
Lending Process – Financial Institution
Time spent by Loan Processor – Old Process
10/15%
10/20%
5%
60/75%
Adm/clerical
General phone
Fill in for
-filing
Inquiries from
Other staff
-typing
Loan Processing
members
-mailing
-gathering data
New Lean Process after Kaizen Event
5% 5%
Phone inquiries
Fill in for
Loans only
Other staff
90%
Loan Processing
81
Keys to Success
»
»
»
»
»
»
»
Create a sense of urgency
Have a vision, communicate it continuously
Focus on key process drivers
Remove all obstacles to achieve the vision
Create short term victories
Don’t declare victory too soon
Speak with data
–
–
–
–
–
Don’t assume
Analyze data – doubt it
Make decisions with data
Take action based on data
Check results
82
The ideal first project…
» … is clearly and unambiguously
measurable. This is not always
possible for administrative Kaizens.
» …satisfies a widely-perceived need.
» … is a repeatable process.
» … is self-contained, not subject to
uncontrollable external influence.
83
Administrative Process Improvement
» Administrative Kaizens are often discontinuous miniKaizens.
» The team meets first to understand the nature of the
project and decide what they will need to know. The
current state is described. A process map may be
developed.
» Any information unavailable at the first meeting is
provided prior to the second meeting.
» The second meeting is generally one day. The project
is analyzed and a complete action plan is developed.
The plan is implemented and the outcomes are
monitored.
» If necessary, a follow up meeting is held.
84
The Kaizen Project Team
» Team members are selected on a project-byproject basis.
» There is a team leader chosen to facilitate and
coordinate. The leader is not in charge in the
traditional sense.
» The team can be comprised of:
 Subject matter experts in the target area.
 Others in the same segment of the organization.
 Individuals from other areas of the organization.
This includes technical staff.
 Individuals from outside the organization.
85
The Kaizen Project Team
An open, egalitarian structure is
important.
When Kaizen project work is
underway, organizational position is
irrelevant and disregarded.
All team members are considered
equal within the team.
86
Key Kaizen Tenets
» An open atmosphere is critical. Free
thinking and contribution are
necessary.
» Everything is open to question. No
assumptions are made.
» A Kaizen event is not developing a
list of ideas or recommendations to
be studied. The outcome is
implemented.
87
Now – Recreate that World
»
»
»
»
»
»
»
Map it – with the experts
Study your map
Implement changes
Celebrate
Study and implement more changes
Celebrate
Repeat, Repeat, Repeat
88
Questions?
89