Make Lean An Innate Way of Thinkingand Increase PO Compliancy

Lucy Wilson & Jason McGovern

Marks & Spencer - A Brief history……..

1884 Michael Marks, a Russian born Polish refugee, opened a stall at Leeds Kirkgate Market. All items were sold for one penny, including nails, screws, soap, wooden spoons and luggage labels.

1928 The St Michael trademark was introduced as a guarantee of quality and value.

1954 Operation Simplification – a project to streamline internal processes in order to save paper and cut down on unnecessary administration– was launched.

1975 In 1975 M&S made its first step into Europe, opening a store on Boulevard Haussman in Paris.

1986 Our first edge of town store opened at the Metro Centre in Gateshead.

1999 Online shopping was launched on our website.

2003 Marks and Spencer Shared Services established

2007 Plan A launched - 100 point five-year ‘eco plan’ to address challenges in the key areas of climate change, waste, sustainable raw materials, fair partner and health

Marks and Spencer Shared Services Ltd(MSSSL)

Location: Salford Quays, Manchester

110 FTE Finance, 120 FTE HR

5 Teams

5 core process areas

6 Years old

Manage: c£10bn revenuesc£8bn payables c£3bn receivables

Supports 65,000 employees and 600+stores

Marks and Spencer Shared Services

Our Journey

January 2003

Finance Shared Services set up

December 2006

New leadership team appointed

Strategy set

Move from accounting centre to Shared Services begins

April 2007

SAP Go live

ERP platform launched for AP, AR, NMP and core financial transactions

March 2008

First year in SAP complete

90% customer satisfaction ratings

66% average KPI rating

£60m of annualised cashflow generation support

July 2008

New business migrated

100% customer satisfaction ratings

79% average KPI rating

Further £30m-£40m annualised cashflow generation targeted

Creating Value with a Passion for Excellence

Why Lean in Marks and Spencer Shared Services?

New Business

Process efficiencies

Change

Business Foundation Programme

What is Lean?

Lean is a philosophy focusing on reduction of waste to improve overall customer value. By eliminating waste, quality is improved, production time and costs are reduced.

The goal of Lean is to accelerate the velocity of the process by reducing waste in all its forms.

Lean is not cost reduction, its finding a better way to get the work done

What is Lean?

Lean is simply creating an environment where you have the right amount of resources, where work is paced

and content targeted according to customer demand.

More importantly, Lean is having the ability to rapidly respond to a signal from the customer

through a standardised process, which means it is predictable, controllable and sustainable

“

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Lean Principles

In their 1996 book ‘Lean Thinking’, Womack and Jones defined a set of five basic principles that characterise a lean enterprise.

Value in customer eyes

Identify all the steps

Flow

Customers pull value

Pursue perfection

History of Lean

Early Years

CPI – Erratic non defined

Silo working

Little inter department communication

Shared ServicesIntroduction

CPI initiated

ERP implementation

CPI / Lean Discovery

Lean Project IdentifiedLean trainingBenefits realisedCPI cultureLean WorkshopsIdea generation

Embedded CPI culture

• Enthusiasm• Appropriate

level of investment

• Enhanced toolkit

Self Sufficient

.Embedded within process areas

BAU

Automated

Creating Value with a Passion for Excellence

Roll-out in Finance Shared Services

Lean Training across management

Blitz Kaizen workshop

Roll out across Finance Shared Services– Teaser campaign

– Project selection by management

– Monthly workshops (cross functional)

– Benefits tracker

– Monthly updates cascaded

– Governance process ensures return on investment

CPI Implementation

Project Selection tool

Pure LEAN STARS

CPI Control IssuesReturn

Delivery Risk

Low

Low High

High

Continuous Process Improvements

CPI is the ongoing effort within FASS to incrementally improve how products & services are provided and

how operations are conducted to ensure we maximise value and maintain control at all opportunities

“”

CPI - Criteria

Reduction in variation

Removal of non-value add

Improves Customer Satisfaction

It reduces time / money / physical waste

Increases quality of our product

It enables us to improve activity measurement

It is required for statutory reasons

It enables the required level of control

Benefits from Lean in Finance Shared Services

Cash Management Process

KPI Reporting Process

NMP Procurement

Intercompany

PO Compliance – Our first Lean project ??

No PO, No Pay removed non-value add activity

Invoices scanned & recorded

Invoices with a PO keyed into SAP

No invoices parked

No PO – invoice returned

KPI’s monitor turnaround times

Vendors were advised how to comply

Go live: 55% compliant

Six months: 90% compliant

Impact on FTE is minimal

WinsCreate a competitive atmosphere

Size of potential benefits

Cross functional teams

Team building

Learns Clear Goal and Objectives

Not always a ‘Big Idea’

Don’t over commit

Biggest bang for your buck

ChangesContinually reassess scope

Pace of implementation

Key Learning’s?

Make Lean An Innate Way of Thinkingand Increase PO Compliancy

Lucy Wilson & Jason McGovern