Lean in Public Services: Is it just for Efficiency? OR Can it only ever be just for Efficiency? Dr Zoe Radnor Associate Professor (Reader) in Operations Management Warwick Business Schoool AIM Management Practice Fellow Lean not just for the Private Sector… Plus Local Government, Fire and Rescue Services……… A Brief History of Lean Who “invented” Lean? Taiichi Ohno Vice President of Manufacturing, Toyota Motor Corporation Toyota Production System 1950s, after WW2 External factors; small market, culture and difficulties in equipment purchase. Inspired by USA supermarkets Understand Value Value-Stream Thinking The SA processing lead time for documents received during January was 15.4 days, of which 14 minutes was spent processing (0.05%) Time to process an SA return • Processing time Document arrives • Activities • Waiting to be sorted • 1 hour • Post sorted into SA • 0.5 min* • Returns sorted into SA floors • 0.5 min* • Returns wait for collection • E2 Collection from post room • 10 min • Pre-log checks • 1.5 min • Log/batch • 0.5 min • Waiting to be captured • E1 capture • E1 code • Overnight data back-up • 2nd day actions • 0.7 min • Refilling • 0.5 min • Total lead time • 15.4 days • • Waiting time • Physical location – Post Room – E2 section – In shelf on the floor – E1 section – Cabinet 1 hour • 14 days • 8 min • 4 min • 1 day Return processed Patient arrives Patient is booked in Treatment by nurse WAIT Patient is seen by doctor WAIT Patient is booked in WAIT Patient is triaged WAIT Patient arrives WAIT Flow: The Process for assessment, minor treatment discharge was redesigned to achieve lower waits Patient is discharged by doctor Patient is seen, treated and given advice by doctor or nurse practitioner and discharged Reduction of Waste 1 Over-production - 60% of 4 Over-processing - computer generated post Sorting post in 21 printed in the post room was categories when 4/5 discarded were enough 2 Waiting - Post delivered by 5 Royal Mail did not always Inventory – 15+ days of work on shelves arrive at 7:45 am 3 Transport - Post moved 6 Rework - Post transferred 500 metres before any between offices; Frequent value-added work was redirection due to mis- performed sorting 7 Motion - In post room the operator moved from desk to scales to measure a single item of post Use of Tools and Techniques within Lean in Public Services Assessment: • To assess the processes at organisational level e.g. value stream mapping, process mapping Improvement: • Tools implemented and used to support and improve processes e Monitoring: • To measure and monitor the impact of the processes and their improvement e.g. control charts, visual management, benchmarking, work place audits • Measures in terms of quality, time, costs, satisfaction levels e.g. 5S, structured problem solving Assessment: Reviewing the work From Current State to Future State Improvement: Structured and systematic use of problem-solving Day-to-day problem solving: 3Cs document Version Originator Date Problem Solving - 3Cs 2.1 Project Office 17-Sep-06 Team Causes identified Concern Countermeasures identified Cause Implementation started Implementation completed Countermeasure Resp Date Due Status This is the basic method of Problem Solving used by teams to address day-to-day issues affecting performance. The process has 3 steps: Concern: Define the Problem clearly – doing this is essential, as it will help to ensure that you don’t try to put the whole world right in one go. Cause Think carefully – try to get to the “ROOT CAUSE” of the problems, rather than just dealing with the symptoms. Countermeasures Try to fix the problem once and for all, but if that’s not possible, then do everything you can to mitigate the impact on the customer. More challenging problems: Structured Approach These are some of the Problem Solving tools that are available, but there are many more 1 - Problem WHAT DO WE WANT TO IMPROVE AND WHERE DO WE WANT TO BE? 2 - Causes 3 C’s Document Brainstorming Kipling SMART Open Questions 5 Why's Timing Plan Fishbone Diagram Web Chart Like & Must Check Sheet Action Plan Pareto Analysis Interviewing WHAT'S STOPPING US FROM ACHIEVING OUR DESIRED STATE? 3 - Options WHAT CHOICES DO WE HAVE ? 6 - Results HOW GOOD WAS THE SOLUTION ? 5 - Implementation WHAT IS OUR ACTION PLAN ? 4 - Solutions WHICH IS THE BEST WAY TO SOLVE OUR PROBLEM ? Improvement: 5S SEIRI Sort SEITON Set in order SEISO Sweep and Shine SHITSUKE Standardise SEIKETSU Sustain Monitoring: Visual Management Team Board Team Communications Hub Resource Planning Lean Transformation – A Two Pronged Attack Understanding Demand and Capacity Understanding Value Strong committed Leadership Linking activity to the Strategy Training and Development Steering Group and Project Team Regular Structured Problem Solving Leadership Challenging: Go, See and Do Workplace Audits Identifying and managing variation and demand Monitoring of end to end Service/Process Delivery Developing Local/ Internal Champions and Facilitators Visual Management: Managed by the front line staff Rapid Improvement Events: Process Mapping and 5 ‘s House of Lean for Public Services ©Zoe Radnor Whole system view Embedded improvement behaviours Focused stable robust processes Having a Communication Process Strategy View HM Court Services Case Study Conducted between November 2009 and April 2010 Site visits to 15 courts across England and Wales, the Central Programme Office Individual interviews and focus groups with 191 individuals across all sites. A quantitative analysis of specific responses to the interview questions Informal discussions with 20 change agents A survey of all change agents across all HMCS regions (71% response rate) Informal discussions with 11 legal advisors Radnor ZJ and Bucci G (2010) “Evaluation of the Lean Programme in HMCS”, HM Court Services, London, May 2010. Lean in HMCS “We were talking about how we do [Lean] for ourselves…. how we build up our own capacity via the Lean Academy style approach and manifest it for ourselves and then take a step back from consultancy” Lean event led by Change Agents Lean reviews leading to ‘tipping point’ • "The point at which a court has fully grasped the concepts of Lean and is able to extend such thinking to all areas of their work without external direction.“ Standard Operating Procedures (SOPs) Team Information Boards (TIBs) Daily Meetings Key Achievements Lean Programme has created significant impact within HMCS • Key element has been the dedicated leadership of the programme, programme team and the support of a Programme Board • Vehicle in meeting the efficiency challenges Staff now have an understanding of the need to change, revising processes and practices which had been untouched for years • Three quarters of the sites visited there was enthusiastic support for Lean Engaging the workforce to the point where there is now an enthusiasm for challenging SRO and the Chief Executive showed a good understanding, high engagement and recognition of the work related to the Lean programme The pace of the Lean programme over the last eighteen months has been relentless and has touched nearly 50% of locations and staff. Exceptional impact with the project breaking even within 6 months. No differences across the courts, location and size Key Findings The biggest impact staff highlighted was more efficient revised processes and, visual management. The continuing role of change agents was critical for the future of the Lean programme. There was a correlation between court manager enthusiasm and drive towards Lean and positive experience of Lean. Staff acknowledged that the working environment had improved for them but could not quite see the impact this was having upon the delivery of the service to the customer. Many staff used phrases such as “when Lean was here” or “after Lean had gone” giving the impression is that Lean was being seen by staff as something external to the site done by the change agents. There was very little recording of performance over time to identify trends or to predict the workload. There was a lot of variability in problem solving both within and across all sites. Case Studies: Lean in Higher Education Organisation Type of Project Tools and Techniques Project Management Outside Facilitation Welsh University Project Name and Start Lean University Started September 2006 University Wide with input from Business School academics RIWs Process Mapping Value Stream Mapping 5Ys Fishbone Diagrams Visual Management TIBs Dedicated central University team leading and running the project No Nottingham Business School Lean @ NBS Started 2008 Business School led with input into central University processes A3s Visual Management Value Stream Mapping Root Cause Analysis Fishbone Diagrams Dean led project Business School Executive oversees project with budget allocation Add on to existing job Yes – external academic acting as consultant. South Coast Business School CLeanUp Business School with some discussion into central University admin processes No RIWs No dedicated team or budget Two individuals running Lean and RIWs Add on to existing job RIWs Process Mapping Project Steering Group oversees project with budget allocation Add on to existing job Yes – external organisation initially undertook RIWs and trained internal facilitators. Midland Business School Operational Excellence Started November 2007 Business School led with some input into central University processes Foundation: Training and Development NBS: • ‘Blanket training’ approach for all 250 staff in Lean techniques. NBS is trying to enable every member of staff to work in a Lean environment. • Three day training programme in mixed groups consisting of academic, administration and clerical. • “If staff are trained, they become more familiar with Lean and are more willing to become integrated with it” Wales University: • Lean Skills for Leaders Programme for middle and senior managers. • To equip managers with the ability to apply Lean thinking and to give them the skills to do continuous improvement work. • “We need key skilled managers and key senior admin staff with good Lean knowledge and understanding to help …keep the momentum of Lean going.” Building Blocks: Organisational Readiness Senior Management Commitment: • Lean at NBS is being led by the Dean. • This involves initial set up for the programme, specifying the training required for staff, reviewing the projects on a weekly basis (A3) and setting a direction to the rest of the school that this is how business is done at NBS (‘unblocking’). • “To become a Lean school, the top management needs to be on board and drive it. This is not an add-on. Its about getting the entire operation of the school adopt Lean.” Link to Strategy: Wales University has a Strategy map. Communication Strategy: Two of the Universities had an area of their web sites detailing the purpose of Lean, projects and achievements. Pillars: Tools and Techniques 3 Business Schools using Rapid Improvement Workshops. Developing Internal Facilitators: Midland Business School • To equip its own staff with the skills to be able to lead on improvement work. • External company X run the RIWs, staff shadowing, followed by training for staff and, then running workshops themselves. • Staff have volunteered to become facilitators and at the moment there is a waiting list for staff to be trained. • Lean is still over and beyond the normal duties of staff and is a real commitment. Process Mapping/ Value Stream Mapping used by all organisations. Problem Solving tools used by 2 Business Schools. Sporadic use of visual management in two organisations to make Lean information visual in public areas. Target = 20 days 2008 cycle - as % of total 2009 cycle - as % of total 4% PG Admissions Process Review 2% 0% 0 10 20 30 40 50 60 70 80 90 100110120130140150160170180190200210220230240 To communicate all initial decisions on postgraduate applications within 4 weeks of receipt. Why? • Volume increasing but fixed resource (67% increase in applications since 2005) • Pressure from stakeholders to increase pace of decision-making • Analysis variation • 5 whys • 7 wastes • CTS Tree • Improve flow • SIPOC • Run charts / • Opportunity Statement • Map process (3 walls of post-it noteshistograms and brown paper!) How? Additional benefits? • ownership • team building • continuous improvement • challenging what we do • control • greater understanding from a wider perspective • reduced paper • scope now extended • better awareness and use of data Before From submission to creation of student record After 6% 99% same day in 2 hours From SITS to form sent to department 2% 93% same day (post) same day (electronic) Department decision 25 days 20 days mean mean 11 days 9 days mean mean Quality assurance, transmission of decision Emails at peak 7000 emails 10 weeks+ 200 emails 3 weeks+ Publication Progress Board WORKING PAPER Level 1 – Abstract / written idea Level 2 – Work in progress Level 3 – Full working paper CONFERENCE PAPER Level 4 – Abstract submitted & accepted to conference Level 5 – Paper submitted & accepted to conference Level 6 – Paper presented at conference SUBMITTED PAPER VISUALIZING THE STATUS OF THE PUBLICATION PROGRESS 1. Print the front page of the paper (A6 format) 2. Attach a birthday sticker and write the date when level 1 was reached (date when you started to work on the paper) 3. Attach progress stickers given the current level of the publication progress UPDATING THE STATUS OF THE PUBLICATION PROGRESS - Update the progress sticker to the new level - The birthday sticker indicates the freshness of the paper and its publication progress - The progress stickers indicate the current and reached level of the publication progress Level 7 - Submitted Level 8 - Revise and resubmit #1 Level 9 - Revise and resubmit #2 PUBLISHED PAPER Level 10 - Published paper Birthday sticker OTHER Presented at internal seminar (independent of level) © Niklas Modig, Stockholm School of Economics Progress stickers = level 7 © Niklas Modig, Stockholm School of Economics © Niklas Modig, Stockholm School of Economics Approaches to Lean Implementation ‘Rapid Improvement Events/ Workshops (RIE) • “RIW provides a way of making improvement manageable by cutting problems into bite-sized chunks. RIW works because it is a process which delivers quick and visible wins.” Full Implementation is embedding the principles through a broad use of the tools. • “Lean gives an opportunity to give suggestions and question why? The days of ‘the way things are done’ have gone” RIEs Vs. Full Implementation CULTURE CHANGE Improvement Opportunity Greater, sustained results achieved Lost and repeated results due to no sustainability Short term gains made Improvement levelled off and eventually stopped due to lack of realizing “true” lean opportunity Kaizen Blitz Rapid Improvement Events Time Source: Chris Craycraft, Whirlpool Awareness, education, organization structure created to support lean Defining Lean Lean as a management practice based on the philosophy of continuously improving processes by either increasing customer value or reducing non-value adding activities (Muda), process variation (Mura), and poor work conditions (Muri). Some key assumptions of Lean: 1.It is possible to determine ‘value’ and ‘waste’ from a customer's point of view, so that wasteful activities in the process can be defined. 2.There is a defined and measurable benefit to the organisation in reducing non-value adding activities; in the private sector this has been a reduction in cost, or an increase in competiveness against the peers 3.Freeing up resources helps the business grow and flow of material, customers or information. Public versus Private Sector Issue Private Sector Authority Public Sector Authority is generally invested in one CEO Can operate in any sector / market Authority is often shared between Senior Officers/ Mangers and professional people (politicians, lawyers, doctors/ surgeons, academics etc..). Overall Goal Profit Create and sustain citizen satisfaction Economic, efficiency and effective Value for Money Accountability Through clear objectives Owners, shareholders Legal reporting requirement Central Agencies, Parliament/ politicians, citizen Information generally ‘acquirable’ (e.g. Access to Information laws) Role of media Primary stakeholder Shareholder is dominant stakeholder Budgets Flexible, based on expected Profit, ROI, EVA Budgets subject to significant changes Conflicting and shifting stakeholder interests and dominance Potential with conflict with government policy Public media opinions influence decision making Relatively fixed, stable budgets Frequently budget based on previous year plus inflationary adjustment Conclusions Although there are initial efficiency gains of Lean in public services, there is a question whether the - unadapted - transfer of Lean tools and techniques will continue to deliver further gains at the systems level. Two crucial assumptions are violated when directly transferring Lean, at the systems level, into public services: Clear understanding of who the customer is: Defining value Reinvestment of released capacity: Developing flow Lean in Public Services currently focused on efficiency and cost cutting: Reduction of waste Lean is not context-free Not manufacturing to service but private to public