Lean Office Training YOU to Recreate Your World Course Agenda »Lean office overview »Definition of waste »Orientation to YESCO Hawaii »Round one of simulation

Lean OfficeTraining 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

Lean Systems

Business as Usual

CustomerCustomer

DeliveryDelivery

CustomerCustomer

ContactContact

Lead-Time

Waste

CustomerCustomer

Delivery Delivery

CustomerCustomer

ContactContact

Lead-Time

(Shorter)

Waste Elimination

“Eliminate Non-Value Added Activities”

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

A streamlined flow of goods or services through an organization in concert

with customer demand and requirements

Customer

Delight

Business Operations

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

Streamline, Synchronize, and Integrate

Process View

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

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

Defects

Overproduction

Waiting

Non-utilized talent

Transportation

Inventory

Motion

Extra processing

Typically 95% of Total Lead Time is Non-Value Added!!!

Value Added

Lean = Eliminating the Waste

©2006 MMTC14

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 MMTC18

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 HawaiiA New Division

29

YESCO Hawaii Orientation

» You are all employees of YESCO Hawaii» Positions to be filled:

- Sales - Material Control- Business Office - Scheduling-Engineering - 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 1Round 1

32

Metrics Scorecard

33

Measures Team 1 Team 2 Team 1 Team 2 Team 1 Team 2Lead TimeWork-In-ProcessOrders Shipped/InstalledDrawings QuotedInvoiced $s $0Material Costs $0Labor Costs $0Overhead Fixed Costs ($5,000) $0

Total Cost $0 $0 $0 $0 $0 $0Total Revenue $0 $0 $0 $0 $0 $0

Profit / Loss Totals $0 $0 $0 $0 $0 $0

YESCO Hawaii

Round 2Round 2

34

Make some improvements!

Metrics Scorecard

35




LET’S GET LEAN

Learn the tools to recreate your WORLD

36

Its all aboutIts all about

TimeTime

DVD

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. Create a macro level flow of process

2. Select a functional area to map

3. Detail the steps

4. Identify NVA and N-NVA steps

5. Analyze the process

6. Develop a future map

7. Develop and implement action plan

39

1. Create Flow of Process

2. Select Functional Area or value stream

Break up departments into “swim lanes”

©2006 MMTC

“YESCO Hawaii” Value Stream Map of business process

Sch

edu

ling

Mat

eria

l Co

ntr

ol

Bu

sin

ess

Off

ice

Sa

les

41

Swim Lane border (divides departments)

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

W

NTIME

Describe the process

stepIf the step is Non-Value Added, which DOWNTIME waste(s) does it represent?

How much time does it take to complete the process step?

O

Value Added

Non-Value Added

Necessary Non-Value Added

What is the walk/travel distance?

Color in:

45


Represents “Inventory”

I

46


Represents a “Decision”

47

Yes or No?


Connects a process within a swim lane

48


Connects steps that cross swim lanes

49


Represents electronic work/data transmission

50


Represents document Reviews, Approvals or Inspections (RAI)

RAI

51

4. Identify NVA & N-NVA Steps

NVAN-NVA VA

Examples of NVA Activities» Traveling (excess transportation or motion of

people or materials)» Inspecting or checking (review-approval-

authorization 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 DelayApprove

or Inspect Hand Off Inventory Totals

Steps

Time

54

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.

5. Analyze the Value Stream Map (using Starbursts)

STARBURST

5. Analyze the Process Map2. 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 Map4. 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)

– Replace manual handoff with an electronic handoff

• Electronically capture and report process events and work status

– 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 MapNow 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

Easy Hard

High

Low

Difficulty

Impa

ct

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

Exercise – Map the process!

64

Symbols & Colors for Process Mapping

Process

Step

Same Person

Step

Between Process Step

I

Inventory

Decision

RAI

Review, Approve Inspect

65

Lean Tools

Fill up your Tool Box!

66

Establishing Takt Time

Takt Time is the pace needed

to meet customer demand.

If you have a Takt Time of two minutes, that means every two minutes the process is 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

27,600 sec (7.67 hours)

460 orders= 60

secGOAL: Produce to Demand!

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 Seiso Seiketsu Shitsuke

Sort Set-In-Order Shine Standardize Sustain

Clear out Configure 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

• Overproduction

• Waiting

• Non-utilized Talent

• Transportation

• Inventory

• Motion

• Extra Processing

Single piece flow

Pull process control

Reduced waste

Improved floor space

72

One Piece FlowConsider 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-ProofingPoka-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 3Round 3

76

Remember to think outside the box!

Metrics Scorecard

77




Customer Service Request – IT Provider

Purchasing

quotes order

Order processing

Receives and

Signs off

Service Rep

defines order

Mgr verifies

order

Customer Service

Prepares form

Admin inputs

To data base

Quote

Needed?

Mgr approves

quote

Quote above

$8,000?Mgr

approval

Mgt Board

approval

Account VP

approval

Purchasing fills

order

Define

order

No

No

Yes

Yes

Old Process – Average 50 days New Process - Average 7 days

Waste removed

Customer Service Rep

Mgr approves

quote

Admin inputs

to data base

Purchasing fills

order

Order processing

Receives and

Signs off

Customer

Admin sends

Approval notice

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

10/15% 10/20% 5% 60/75%

90% 5% 5%

Adm/clerical

-filing

-typing

-mailing

-gathering data

General phone

Inquiries from

members

Fill in for

Other staff

Loan Processing

Phone inquiries

Loans only

Fill in for

Other staffLoan Processing

Time spent by Loan Processor – Old Process

New Lean Process after Kaizen Event

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 mini-Kaizens.

» 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-by-project

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.Subject matter experts in the target area.

Others in the same segment of the organization.Others in the same segment of the organization.

Individuals from other areas of the organization. Individuals from other areas of the organization.

This includes technical staff.This includes technical staff.

Individuals from outside the organization.Individuals from outside the organization.

85

The Kaizen Project TeamAn 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

Documents

Lean Office Training YOU to Recreate Your World Course Agenda »Lean office overview »Definition of waste »Orientation to YESCO Hawaii »Round one of simulation