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Lean Office OverviewLean Office Overview

http://http://www.managementsupport.comwww.managementsupport.com

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OutlineOutline

1.1. What is Lean?What is Lean?

2.2. 5S & Visual Controls5S & Visual Controls

3.3. KaizenKaizen

4.4. Value StreamsValue Streams

5.5. Pull ManufacturingPull Manufacturing

6.6. Mistake ProofingMistake Proofing

7.7. Quick ChangeoverQuick Changeover

8.8. Six SigmaSix Sigma

9.9. Lean AccountingLean Accounting

10.10. Theory of ConstraintsTheory of Constraints

11.11. Human FactorsHuman Factors

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Eight Service Industry WastesEight Service Industry Wastes

1.1. Errors in documentsErrors in documents

2.2. Transport of documentsTransport of documents

3.3. Doing unnecessary work not requestedDoing unnecessary work not requested

4.4. Waiting for the next process stepWaiting for the next process step

5.5. Process of getting approvalsProcess of getting approvals

6.6. Unnecessary motionsUnnecessary motions

7.7. Backlog in work queuesBacklog in work queues

8.8. Underutilized employeesUnderutilized employees

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Examples of Office Process Waste Examples of Office Process Waste

•Too many signature levels•Unclear job descriptions• Obsolete databases/files/folders• Purchase Orders not matching quotation• Errors – typo’s, misspelling, wrong data• Waiting – for information, at meetings, etc.• Poor office layout• Unnecessary E-mails

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5S and Visual Control5S and Visual Control

5 Elements of 5S5 Elements of 5S Why 5S?Why 5S? WasteWaste Workplace observationWorkplace observation SSortort SStraightentraighten SShinehine SStandardizetandardize SSustainustain Visual FactoryVisual Factory

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What is Kaizen?What is Kaizen?

Kaizen (Ky’zen)Kaizen (Ky’zen) ““Kai” means “change”Kai” means “change” ““zen” means “good (for the better)”zen” means “good (for the better)” Gradual, orderly, and continuous improvementGradual, orderly, and continuous improvement Ongoing improvement involving everyoneOngoing improvement involving everyone

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OutlineOutline

What are Value Streams?What are Value Streams? Identifying the Value StreamsIdentifying the Value Streams Value Stream MappingValue Stream Mapping The Current StateThe Current State The Future StateThe Future State Implementing ChangeImplementing Change RoadblocksRoadblocks

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Push Vs. Pull Scheduling Push Vs. Pull Scheduling

Push Scheduling Push Scheduling • • traditional approach traditional approach • “ • “move the job on when finished” move the job on when finished” • • problems - creates excessive inventory problems - creates excessive inventory Pull scheduling Pull scheduling • • coordinatedcoordinated • • driven by demand (pulled through system) driven by demand (pulled through system) • • extensive use of visual triggers extensive use of visual triggers (production/withdrawal kanbans) (production/withdrawal kanbans)

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Management philosophy of continuous and forced problem Management philosophy of continuous and forced problem solving (forced by driving inventory out of the system)solving (forced by driving inventory out of the system)

Supplies and components are ‘pulled’ through system to Supplies and components are ‘pulled’ through system to arrive arrive wherewhere they are needed they are needed whenwhen they are needed. they are needed.

What is Just-in-Time?What is Just-in-Time?

Goal: Achieve the minimal level of resources required to add the necessary value in the system.

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Japanese word for cardJapanese word for card Authorizes output from downstream operations based on Authorizes output from downstream operations based on

physical consumptionphysical consumption May be a card, flag, verbal signal, etc.May be a card, flag, verbal signal, etc. Used often with fixed-size containersUsed often with fixed-size containers Kanban quantities are a function of lead-time and Kanban quantities are a function of lead-time and

consumption rate of the item being replenished (min consumption rate of the item being replenished (min qty=(demand during lead-time + safety stock)/ container qty=(demand during lead-time + safety stock)/ container quantity) quantity)

KanbanKanban

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A philosophy that rejects batch, lot or mass processing as A philosophy that rejects batch, lot or mass processing as wasteful.wasteful.

States that product should move (flow) from operation to States that product should move (flow) from operation to operation, only when it is needed, in the smallest operation, only when it is needed, in the smallest increment. increment.

One piece is the ultimate (one-piece-flow)One piece is the ultimate (one-piece-flow)

One Piece FlowOne Piece Flow

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Standardized work consists of three elements:Standardized work consists of three elements:

Takt timeTakt time Matches the time to produce an itemwith the rate of Matches the time to produce an itemwith the rate of

sales. It is the basis for determining workforce size and sales. It is the basis for determining workforce size and work allocation.work allocation.

Standard in-process inventoryStandard in-process inventory The minimum number of parts, including units in The minimum number of parts, including units in

machines, required to keep a cell or process moving.machines, required to keep a cell or process moving.

Standard work sequenceStandard work sequence The order in which a worker performs tasks for various The order in which a worker performs tasks for various

processes.processes.

Once a standard work is set, performance is measured and Once a standard work is set, performance is measured and continuously improvedcontinuously improved

Standardized WorkStandardized Work

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What is Mistake Proofing?What is Mistake Proofing?

• The use of process or design features to prevent errors or their The use of process or design features to prevent errors or their negative impact.negative impact.

• Also known as Also known as Poka yokePoka yoke, , Japanese slang for “avoiding Japanese slang for “avoiding inadvertent errors” which was formalized by Shigeo Shingo.inadvertent errors” which was formalized by Shigeo Shingo.

• Inexpensive.Inexpensive.• Very effective.Very effective.• Based on simplicity and ingenuity.Based on simplicity and ingenuity.

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Changeover Time DefinedChangeover Time Defined

• Changeover time is the total elapsed time between the last good unit of the previous run, at normal efficiency, to the first good unit of the succeeding run, at full efficiency.

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A Vision and Philosophical commitment to our consumers to offer the highest quality, lowest cost products

A Metric that demonstrates quality levels at 99.9997% performance for products and processs

A Benchmark of our product and process capability for comparison to ‘best in class’

A practical application of statistical Tools and Methods to help us measure, analyze, improve, and control our process

What is Six Sigma?What is Six Sigma?

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Activity-Based CostingActivity-Based Costing

Allocates overhead to multiple activity cost pools and assigns Allocates overhead to multiple activity cost pools and assigns the activity cost pools to products by means of cost driversthe activity cost pools to products by means of cost drivers

An activity is any event, action, transaction, or work sequence An activity is any event, action, transaction, or work sequence that causes the incurrence of cost in producing a product or that causes the incurrence of cost in producing a product or providing a serviceproviding a service

A cost driver is any factor or activity that has a direct cause-A cost driver is any factor or activity that has a direct cause-effect relationship with the resources consumedeffect relationship with the resources consumed

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Lean AccountingLean Accounting

Lean Accounting is intended to replace traditional accounting and Lean Accounting is intended to replace traditional accounting and measurement systems; it is measurement systems; it is notnot intended be an additional intended be an additional analysis. Lean Accounting is right for companies that are well on analysis. Lean Accounting is right for companies that are well on the path toward lean.the path toward lean.

Lean Accounting is more than a set of tools relating to Lean Accounting is more than a set of tools relating to measurement, capacity usage, value, and continuous measurement, capacity usage, value, and continuous improvement. Together these tools become a lean business improvement. Together these tools become a lean business management system that is radically different from traditional management system that is radically different from traditional management.management.

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Theory of ConstraintsTheory of Constraints

Based on the concepts of drum, buffer and ropesBased on the concepts of drum, buffer and ropes

DrumDrum Output of the constraint is the drumbeatOutput of the constraint is the drumbeat

Sets the tempo for other operationsSets the tempo for other operations

Tells upstream operations what to produceTells upstream operations what to produce

Tells downstream operations what to expectTells downstream operations what to expect

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WHAT IS ERGONOMICS?WHAT IS ERGONOMICS?

- It is the practice of arranging the environment to fit the person- It is the practice of arranging the environment to fit the person

working in it.working in it.

- Ergonomic principles help reduce the risk of potential- Ergonomic principles help reduce the risk of potential

injuries from :injuries from :

* Overuse of muscles * Bad Posture* Overuse of muscles * Bad Posture

* Repetitive motion* Repetitive motion

- Objective of ergonomics is to accommodate workers- Objective of ergonomics is to accommodate workers

through the design of:through the design of:

* Tasks * Controls * Tools* Tasks * Controls * Tools

* Work stations * Displays * Lighting & equipment* Work stations * Displays * Lighting & equipment

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The cutting edge of organizational success (Nonaka, 1991)

The engine transforming global economies (Bell, 1973, 1978)

Leading us toward a new type of work with new types of workers (Blackler, Reed and Whitaker, 1993)

The element that will lead to the demise of private enterprise capitalism (Heilbruner, 1976)

The sum total of value-added in an enterprise (Peters, 1993)

The “mobile and heterogeneous [resource that will end the] hegemony of financial capital [and allow employees to] seize power” (Sveiby & Lloyd, 1987)

Why Knowledge Management?

Knowledge is fast becoming a primary factor of production (e.g., Handy, 1989, 1994; Peter, 1993; Drucker, 1992)

Knowledge is: Knowledge results in:

Conclusion

The “learning organization” (Mayo & Lank, 1995)

The “brain-based organization” (Harari, 1994)

Intellectual capital” (Stewart, 1994)

“Learning partnerships” (Lorange, 1995)

Obsolete capitalists economies and radically different societies (Drucker, 1993)

Source: Theseus International Management Institute, February 2000

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Cost of AccidentsCost of Accidents

Direct CostsDirect Costs Medical Costs (including worker’s comp)Medical Costs (including worker’s comp) Indemnity PaymentsIndemnity Payments

Indirect costsIndirect costs Time Lost (by worker and supervisor)Time Lost (by worker and supervisor) Schedule delaysSchedule delays Training new employeesTraining new employees Cleanup time / equipment repairsCleanup time / equipment repairs Legal feesLegal fees

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Conducting Effective MeetingsConducting Effective Meetings

Preparing for the MeetingPreparing for the Meeting Set Objectives – Set Objectives – problems to solve, issues to problems to solve, issues to

address, decisions to be madeaddress, decisions to be made Select ParticipantsSelect Participants Set a Time and PlaceSet a Time and Place Plan the AgendaPlan the Agenda Distribute the Agenda and Relevant Materials in Distribute the Agenda and Relevant Materials in

AdvanceAdvance Consult with Participants Consult with Participants

Before the MeetingBefore the Meeting