Lean in Public Services: Is it just for Efficiency?

Dr Zoe Radnor

Associate Professor (Reader) in Operations Management

Warwick Business Schoool

AIM Management Practice Fellow

ORCan it only ever be just for Efficiency?

Lean not just for the Private Sector…

Plus Local Government, Fire and Rescue Services………

A Brief History of Lean

Who “invented” Lean?

Taiichi OhnoVice 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

• Processing time • Waiting time

• E2 Collection from post room

• Pre-log checks

• Log/batch

• Waiting to be captured

• E1 capture

• E1 code

• Overnight data back-up

• 2nd day actions

• Refilling

• Total lead time

• Activities • Physical location

– Post Room

– E2 section

– In shelf on the floor

– E1 section

– Cabinet

• 10 min

• 1.5 min

• 0.5 min

• 14 days

• 8 min

• 4 min

• 1 day

• 0.7 min

• 0.5 min

• 15.4 days

• 0.5 min*

• 0.5 min*

• 1 hour

• 1 hour• Waiting to be sorted

• Post sorted into SA

• Returns sorted into SA floors

• Returns wait for collection

Time to process an SA return

Returnprocessed

Documentarrives

The SA processing lead time for documents received during January was 15.4 days, of which 14 minutes was spent processing (0.05%)

Value-Stream Thinking

Flow: The Process for assessment, minor treatment discharge was redesigned to achieve lower waits

Treatmentby nurse

Patient arrives

Patient istriaged

Patient is booked in

Patient isseen bydoctor W

AIT

WA

IT

WA

IT

WA

IT

WA

IT Patient isdischarged by doctor

Patient arrives

Patient is booked in

Patient is seen, treated and given advice by doctor or nurse practi-tioner and discharged

Waiting - Post delivered by

Royal Mail did not always

arrive at 7:45 am

7 Motion - In post room the

operator moved from desk

to scales to measure a

single item of post

6 Rework - Post transferred

between offices; Frequent

redirection due to mis-

sorting

5 Inventory – 15+ days of

work on shelves

Transport - Post moved

500 metres before any

value-added work was

performed

Over-production - 60% of

computer generated post

printed in the post room was

discarded

4Over-processing -

Sorting post in 21

categories when 4/5

were enough

2

3

1

Reduction of Waste

Use of Tools and Techniques within Lean in Public ServicesAssessment: •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

These are some of the Problem Solving tools that are available, but there are many more

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

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 DO WE WANTTO IMPROVE AND WHERE DO WE WANTTO BE?

2 2 -- CausesCausesWHAT'S STOPPING US FROM ACHIEVING OURDESIRED STATE?

3 3 -- OptionsOptionsWHAT CHOICES DO WE HAVE ?

6 6 -- ResultsResultsHOW GOOD WAS THE SOLUTION ?

5 5 -- ImplementationImplementationWHAT IS OUR ACTION PLAN ?

4 4 -- SolutionsSolutionsWHICH IS THE BESTWAY TO SOLVE OURPROBLEM ?

11 -- ProblemProblemWHAT DO WE WANTTO IMPROVE AND WHERE DO WE WANTTO BE?

2 2 -- CausesCausesWHAT'S STOPPING US FROM ACHIEVING OURDESIRED STATE?

3 3 -- OptionsOptionsWHAT CHOICES DO WE HAVE ?

6 6 -- ResultsResultsHOW GOOD WAS THE SOLUTION ?

5 5 -- ImplementationImplementationWHAT IS OUR ACTION PLAN ?

4 4 -- SolutionsSolutionsWHICH IS THE BESTWAY TO SOLVE OURPROBLEM ?

11 -- ProblemProblem

VersionOriginatorDate

Implementation completed

Status

2.1Project Office

Causes identified Countermeasures identified Implementation started

Concern

Team

Resp Date DueCause Countermeasure

17-Sep-06Problem Solving - 3Cs 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.

CauseThink carefully – try to get to the “ROOT CAUSE” of the problems,rather than just dealing with the symptoms.

CountermeasuresTry 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.

Improvement: Structured and systematic use of problem-solving

Day-to-day problem solving: 3Cs document

More challenging problems: Structured Approach

SHITSUKEStandardise

SEIKETSUSustain

SEISOSweep and Shine

SEITONSet in order

Improvement: 5SSEIRISort

Team Board

Monitoring: Visual Management

Team Communications Hub

Resource Planning

Lean Transformation – A Two Pronged Attack

Cultural change

Technica

l change

House of Lean for Public Services

Vis

ual M

anag

emen

t: M

anag

ed b

y th

e fr

ont l

ine

staf

f

Whole system viewEmbedded improvement behaviours

Focused stable robust processes

Understanding Demand and Capacity

Understanding Value

Having a Process View

Linking activity to the Strategy

Strong committedLeadership

Communication Strategy

Training and Development

©Zoe Radnor

Steering Group and Project Team

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 AchievementsLean 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 EducationOrganisation Project Name

and StartType of Project Tools and

TechniquesProject Management Outside Facilitation

Welsh University Lean UniversityStarted September 2006

University Wide with input from Business School academics

RIWsProcess MappingValue Stream Mapping5YsFishbone Diagrams Visual ManagementTIBs

Dedicated central University team leading and running the project

No

Nottingham Business School

Lean @ NBSStarted 2008

Business School led with input into central University processes

A3sVisual ManagementValue Stream MappingRoot Cause AnalysisFishbone Diagrams

Dean led projectBusiness School Executive oversees project with budget allocationAdd 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 RIWs

No dedicated team or budgetTwo individuals running Lean and RIWsAdd on to existing job

No

Midland Business School

Operational Excellence Started November 2007

Business School led with some input into central University processes

RIWsProcess Mapping

Project Steering Group oversees project with budget allocationAdd on to existing job

Yes – external organisation initially undertook RIWs and trained internal facilitators.

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.

99% in 2 hours

93%same day

(electronic)

6%same day

2%same day

(post)

From submission to creation of student

record

From SITS to form sent

to department

Department decision

20 daysmean

25 daysmean

Quality assurance,

transmission of decision

9 daysmean

11 daysmean

Emails at peak

7000 emails

10 weeks+

200 emails

3 weeks+

PG AdmissionsProcess Review

• Volume increasing but fixed resource (67% increase in applications since 2005)• Pressure from stakeholders to increase pace of decision-making

Why?Before After

How?• CTS Tree• SIPOC• Opportunity Statement• Map process (3 walls of post-it notes and brown paper!)

• Analysis variation• 5 whys• 7 wastes• Improve flow• Run charts / histograms

Additional benefits?

Target = 20 days

• 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

To communicate all initial decisions on postgraduate applications within 4 weeks of receipt.

Publication Progress Board

SUBMITTED PAPER

Level 7 - Submitted

Level 8 - Revise and resubmit #1

Level 9 - Revise and resubmit #2

CONFERENCE PAPER

Level 4 – Abstract submitted & accepted to conference

Level 5 – Paper submitted & accepted to conference

Level 6 – Paper presented at conference

WORKING PAPER

Level 1 – Abstract / written idea

Level 2 – Work in progress

Level 3 – Full working paper

PUBLISHED PAPER

Level 10 - Published paper

OTHER

Presented at internal seminar (independent of level)

VISUALIZING THE STATUS OF THE PUBLICATION PROGRESS1. 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

Birthday sticker

Progress stickers= level 7

© Niklas Modig, Stockholm School of Economics

© 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”

Improvement Opportunity

Time Awareness, education, organization structurecreated to support lean

RIEs Vs. Full Implementation

Greater, sustainedresults achieved

Improvement levelled off and eventually stopped due to lack of realizing “true” lean opportunity

CULTURE CHANGE

Short term gains made

Lost and repeated results due to no sustainability

Kaizen Blitz

Rapid Improvement Events

Source: Chris Craycraft, Whirlpool

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 peers3.Freeing up resources helps the business grow and flow of material, customers or information.

Public versus Private SectorIssue Private Sector Public Sector

Authority 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

Conflicting and shifting stakeholder interests and dominance

Potential with conflict with government policy Public media opinions influence decision making

Budgets Flexible, based on expected Profit, ROI, EVA

Budgets subject to significant changes

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-freeNot manufacturing to service but private to public