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Living Lean
How to SAVE MONEY andmake time for the FUN STUFF
Rebecca Goldberg and Elliott Weiss
Illustrations by Michael Twery
Goldberg Productions
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Our Problem
Lean is the relentless pursuit of creating value
by strategically eliminating waste.
So what?
Do our students really care?
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Our Solution
Living Lean: How to Save Money and Make Timefor the Fun Stuff
A collection of vignettes that presents everyday
scenarios with lean insights Why?
Ease of accessibility
Simple accounts
Entertaining and lively characters Personal AHAs!
Not manufacturing!
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Case Use
Stand Alone
Discussion to introduce concepts
Supplementary
To augment understanding of business cases
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CUSTOMER
COORDINATION CONTROL
CAPABILITIES
The OperationsManagement Process
CONTEXT/CULTURE/
COMPETITION
The 8C Model of Operations.
Identify the customerneeds, Design the capabilitiesto meet those needs,
Develop a controlsystem to assure those
needs are met and improved upon,
Coordinatewith our suppliers and
customers along the supply chain.
All of this is done within the general contextof
the environment and our competitors, while
creating a cultureof change and improvement.
Which leads toCASH
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CUSTOMER
Defining the Customer Value Proposition
Theron Hunters Coffee Shop (UVA-OM-1455)
Managing Variability Lunch with Guinevere (UVA-OM-1463)
Understanding Littles Law
Dylan and Amelia Have a Cuppa (UVA-OM-1450)
Achieving Single-Piece Flow
Belinda, Bags and Batches (UVA-OM-1466)
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CAPABILITY
Managing Constrained Resources
Donna Johnson and the Bottlenecks (UVA-OM-1449)
Identifying Non-Value Added Activities
Todds Balancing Act (UVA-OM-1425)
Mapping the Value Stream
Rebeccas Morning Routine (UVA-OM-1427)
Establishing Standard Work
Erika, in Through the Out Door (UVA-OM-1426)
Implementing the 5S System
David and the Case of the Haunted House (UVA-OM-1448)
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CONTROL
Using Process Behavior Charts
Tracy Scott Manages His Blood Sugar (UVA-OM-1443)
Designing Experiments
Bobs A-maize-ing Popcorn (UVA-OM-1467)
Maintaining Reliable Equipment
Missys Car Maintenance (UVA-OM-1434)
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COORDINATION
Designing a Supply Chain
Brians Lunch Dilemma (UVA-OM-1435)
Determining Lot Size
Peter Goes Shopping (UVA-OM-1462)
Setting Order Quantities and Safety Stocks
Brad and Gina and Baby Makes Three (UVA-OM-1486)
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CONTEXT AND CULTURE
Enabling Rational Decision Making
Zekes Tree (UVA-OM-1433)
Analyzing Root Causes Jackson and Wyatt Learn to Share (UVA-OM-1464)
Putting It All Together
Chloe Manages the Family Business (UVA-OM-1465)
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Customer (Section 1, Cases 1-4)
Case and Synopsis Learning Objectives Lean Takeaways
Theron Hunters Coffee Shop (UVA-OM-1455)
Planning to shelve his corporate career and open a
high-end coffee house, Theron Hunter meets with
his friend and potential business partner, John, to
discuss his options. He identifies his target market
and ideal location, then considers factors relevantto creating value for professional daytime foot
traffic?
Customer defined valueproposition
Order-winning criteria Make-to-order vs. make-to stock Voice of the customer Competing on capabilities Operating system strategic design
In order to identify those activities that do not add value,
one must first understand the customer defined value
proposition. Only when one realizes how cost, quality,
delivery and customization are important to the
customer can one take steps to improve the product,
service or experience. Thus, for Theron to lean out hiscoffee shop, he must first define this value for the
customer.
Assignment Questions
1. As you read Therons story, think about what Theron needs to do to make his coffee shop appealing enough to potential customers. What choices musthe make in order to become profitable? How should he decide among the alternatives?
2. How does each of Therons operating systems decisions affect his value proposition? Which are most critical to his business success?3. How might an ice cream parlor use the concepts of make-to-stock or make-to-order? A clothing manufacturer?4. What is your personal value proposition? What are the skills that you bring or might bring to your current or future organization? How is this similar to
Therons situation? How is it different?
How to Use the Cases
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How to Use the Cases
Class Discussion, Module 1 (Customer), Case 1: THERON HUNTERS COFFEE SHOP
Vignette Personal Professional
Value proposition
John asks Theron to clarify the value
proposition of the coffee shop and match his
distinctive features to what the customer
wants.
Do students have a value proposition? How is it
reflected in resumes, cover letters, career choice,
educational choices, personal presentation, and
career strategy?
Compare the value proposition of a
fast food restaurant with that of a
five-star restaurant.
Order-winning
criteria
Theron considers two product lines: fast but
limited selection and slow but highly
customized.
How do students market themselves to potential
employers, and to potential customers? How do they
focus on the order-winning criteria of the person
with whom they interact?
Ask students for business/
organizational examples of each
content area and discuss. In what
ways do the student examples
illustrate the intentional use of
these concepts? In what ways do
the examples illustrate suboptimal
use of the concepts with room for
improvement?
Made-to-order
versus made-to-
stock
Therons two product lines are made at
different points: in batches and individually.
How do students manage their homework,
professional work, email, and housework? Do they
utilize a make-to-order or a make-to-stock approach?
What are the circumstances that would warrant one
or the other?
Voice of the
customer
Theron can do market research pre-entry,
then weave multiple forms of customer
engagement into his business plan.
Ask for examples of ways in which they have listened
to their employers, customers, spouses, significant
others, families and/or friends to improve the ways
they relate to themand improved their own
experience of the relationship as a result.
Competing on
capabilities
Theron knows how to select and brew coffee.
He also has a background in finance, which
will help him run the numbers. The key is
finding a way to relate these capabilities to
what the customer wants and will pay for.
How have students chosen to highlight or focus ondeveloping their own personal core strengthsand
how they have adapted to or compensated for their
own personal weaknesses?
Operating system
strategic design
Theron thinks critically about his design
choices and should continue to do so.
In what ways have students structured their homes,
families, and/or schoolwork processes intentionally
and in relation to their core competenciesor gaps
in those competencies?
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A Practical Example: Lunch with Guinevere1
Salad Bar
Custom MealChefs Special
2
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Practical Example: Managing Inventory
When to order the next beer?
Here?
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Pragmatic Inventory and EOQ/ROP: Which are You?
Gina
Brad
Lena
Tina
On Hand ROP
Copyright 2012 Elliott N. Weiss
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Pragmatic Lean - Metrics
Define the defect:
Dinner without all the family members present physically, or
Dinner with the entire family, but without all the members
being relaxed and engaged.
If someone is too tired or distracted to engage, then the primary
goal of emotional interaction is missed.
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Other Personal Applications
XmR Project
A3 Report
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Process Behavior Chart Project
Toward the end of the term we will learn about a technique for process
improvement called XmR charts. At the beginning of the term you will be asked to
start collecting data on a process measure of your choice. Once we learn about
XmR charts, I will ask you to submit an analysis of your own data set.
Examples Body weight
Pulse
Blood pressure
Commute time
Number of steps taken per day
Number of diaper changes
Time taken for bathroom breaks
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-400
-200
0
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1600
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XValue
Observation Number
Individual Observations
Initially, the data looks strange, and poorly controlled
This Is Really 2
Processes!
Fits with
knowledge of
human
restroomhabits
Solution is to
split data into
Process #1
and Process
#2
0
200
400
600
800
1000
1200
1400
0 10 20 30 40 50 60
MovingRange
Observation Number
Moving RangeUpper Limit Center Lower LimitX chart 623.082 183.000 (257.082)
mR chart 541.003 165.444 n/a
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0
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40
60
80
100
120
140
160
180
200
0 5 10 15 20 25 30 35 40 45
XValue
Observation Number
Process #1
Process #1 is well controlled with a tight tolerance
I suspect these are
detours of some kind,
or chance encounterswith people I needed
to speak with
0
20
40
60
80
100
120
0 5 10 15 20 25 30 35 40 45
MovingRange
Observation Number
Moving RangeUpper Limit Center Lower Limit
X chart 107.820 89.200 70.580mR chart 22.890 7.000 n/a
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0
200
400
600
800
1000
1200
1400
0 2 4 6 8 10 12 14 16 18 20
XValue
Observation Number
Individual Observations
Process #2 is also well controlled, but with much more variance
Definite trend here,
but I am not sure why
Upper Limit Center Lower LimitX chart 1,033.544 686.857 340.170mR chart 426.190 130.333 n/a
0
100
200
300
400
500
600
0 2 4 6 8 10 12 14 16 18 20
MovingRange
Observation Number
Moving Range
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Topic: Lean Implementation
Deliverables: As part of the Operations Management course, each student in the MBA for Executives
program is required to submit an A3 project report describing a process improvement activity. Theactivity will utilize one of the following techniques:
Identification and elimination of muda 5S Standard work
These techniques have been covered and discussed during the Operations course in Terms 3 and 4. Theprocess improvement activity may be from either your personal or professional life. Results should bepresented as an A3 report
Gallery Walk
Prior to dinner on the night of August 22, 2013 we will have an open reception with wine and cheesewhere all projects will be presented.
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Sample Personal Topics
Sustained Weight Loss
The Beauty of Sleep
The Closet Consolidation
Improve Golf Chip Shot
Improving Flip Cup Outcomes
Precision Parking (5S in a Garage)
Kite Boarding Setup Time
Throughput Time reduction for Kids Bath
Standard Work for Potty Usage
Reducing Muda in the Middle of the Night BabyFeeding
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A3: Standard Work and Throughput Time Reduction for T-Shirt Folding Author: ANTHONY HOANG Date: AUGUST 2013
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Sustain the new and improved FlipFold-based process for T-Shirt folding
Continue to master the FlipFold with current persons
Train new persons on the use of the FlipFold
Process
Reduce variability in the resulting
lengthand widthof folded T-Shirts.
A key leader of the Hoang House (aka mom)
has a stated requirement that T-Shirts be
folded consistently to support orderly stacking
and storage in the closet and dresser drawers
ANALYSIS
ANALYSIS OF VARIABILITY
ANALYSIS OF THROUGHPUT TIME
Time to Fold 10 T-Shirts
(min) Avg Time per T-Shirt (sec)
Person 1 2:28 0:14
Person 2 3:43 0:22
Person 3 2:07 0:12
TOTAL= 8:18 AVG= 0:16
Average Time
per T-Shirt
16 sec
91011121314
Lengthof
0
2
4
Moving
VARIABILITY IN FOLD LENGTH VARIABILITY IN FOLD WIDTH
6
7
8
Widthof
0
1
Moving
mR Average
0.26 in
mR Average
0.72 in
Avg T-Shirt
Length
11.5 in
Avg T-Shirt
Width
6.9 in
DRIVERS OF VARIABILITY1. Varying t-shirt sizes
2. Fabric quality differences
3. Varying folding techniques
are used by each person
4. Lack of standards
5. Human error
6. Folding does not occur in
one continuous session
REDUCE VARIABILITYREDUCE THROUGHPUT
TIME
Reduce the timerequired to
fold T-Shirts.
With an estimated 2900 T-Shirts folds
performed in the Hoang House each
year, there is a desire to reduce the
amount of time consumed performing
these folds.
PROBLEM DEFINITION
Analysis of original folding process results (30 individual T-Shirt folds = 3 people x 10 T-Shirts)
FUTURE STEPS
RESULTS
Apply technology to the T-
Shirt folding process to address
variability through
standardization of work
Achieve time efficiencies in
the folding process via
technology
Procure FlipFold, The
Ultimate Folding Tool as seen
on TV
Train all folders on the
FlipFold
RECOMMENDATION / PLAN
Analysis of the FlipFold-based process results (30 individual T-Shirt folds = 3 people x 10 T-
Shirts)
91011121314
Length
0Moving
6
8
Widt
h
0
mR
VARIABILITY IN FOLD LENGTH VARIABILITY IN FOLD WIDTH
mR Average
0.47 in
Avg T-Shirt
Length
9.76 in
mR Average
0.21 in
Avg T-Shirt
Width
6.8 in
0:00
0:28
0:57
0 10 20 30
TimeperFold
(Run)
Folds (30 Runs per Process)
Time per T-Shirt folded (sec)Ori
gin
al
Pro
cAverage Time
per T-Shirt
13 sec
% Time Reduction
Person 1: 26%
Person 2: 21%
Person 3: 16%
Variability was reduced in fold length (-.25in on mR) and width (-.05in on
mR)
Throughput Time was reduced by 21%
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=0f93vVptjzxyEM&tbnid=XxdUYWsHS6kq2M:&ved=0CAUQjRw&url=http://www.cyberbrands.com/pub/flipfold.html&ei=TP4VUs7TF9DD4APOpoDQDw&bvm=bv.51156542,d.dmg&psig=AFQjCNHu8Svnve96Ekg7Xl7GyFuAL48nWw&ust=1377259421947369http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=0f93vVptjzxyEM&tbnid=XxdUYWsHS6kq2M:&ved=0CAUQjRw&url=http://www.cyberbrands.com/pub/flipfold.html&ei=TP4VUs7TF9DD4APOpoDQDw&bvm=bv.51156542,d.dmg&psig=AFQjCNHu8Svnve96Ekg7Xl7GyFuAL48nWw&ust=1377259421947369http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=0f93vVptjzxyEM&tbnid=XxdUYWsHS6kq2M:&ved=0CAUQjRw&url=http://www.cyberbrands.com/pub/flipfold.html&ei=TP4VUs7TF9DD4APOpoDQDw&bvm=bv.51156542,d.dmg&psig=AFQjCNHu8Svnve96Ekg7Xl7GyFuAL48nWw&ust=1377259421947369http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=0f93vVptjzxyEM&tbnid=XxdUYWsHS6kq2M:&ved=0CAUQjRw&url=http://www.cyberbrands.com/pub/flipfold.html&ei=TP4VUs7TF9DD4APOpoDQDw&bvm=bv.51156542,d.dmg&psig=AFQjCNHu8Svnve96Ekg7Xl7GyFuAL48nWw&ust=13772594219473697/27/2019 3B Living Lean (Weiss)
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Sample Professional Topics
Material Loss Reduction in Plastics Manufacture
Optimal Cross Docking
Marketing Lead Generation
Muda in an Emergency Department, Improving
Throughput Time
Reducing Loan Turnaround Times
Credit Bureau Complaint Reduction
Improving the Database Build Process
A3 Report: Criss-Cross will make you dock, dock! Author: Arjun Moldanado Date: 8/22/2013
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Based on the previous 12 months worth of data, approximately 40% of inbound
warehouse orders could be immediately shipped out to fulfill orders. However,
existing warehouse procedures and limitations within the ERP systems existing
programming have previously limited the warehouses ability to cross-dock.
I. Background:
II. Problem Analysis:
Several issues create prevent or inhibit implementing the ability to cross-dock.
Inability for the Receiving Team to identify orders that qualify for X-docking. Inability to release orders upon receipt via the ERP system.
The actual printing of the pick tickets. and timing of the pick release batches.
Separating out cross-dock orders from inventory requiring put-away.
The distance between the Receiving Team and the Pick/Pack & QA Team.
III. Implementation:
To address the aforementioned problems, implementation of cross-docking
required the following procedural and technical enhancements:
A note in the receiving field identifying
lines capable of being immediately
shipped as well as adding printers at the
receiving workstation where those orders
will release regularly.
Locators adjacent to the Receiving station
to be received into and pallets next to
the receivers to identify cross-dock orders
from put-aways.
Physically moving of a Pick/Packstation closer to the Receiving
station and combining it with
the QA process.
Ancillary notes:
Pick releases specifically for cross-docking orders would now release 6 times
per day including 5 minutes prior to the standard twice-per-day pick releases
for normal orders allowing for continuous flow of orders.
The immediate pulling of orders to be shipped eliminated the need for put
away and the subsequent picking from locators throughout the warehouse. It
IV. Total Effect:
V. Action Items:
0.002.004.006.008.00
10.0012.0014.0016.0018.0020.0022.00
1 2 3 4 5 6 7 8 9 10
Total Time(minutes)
Avg Time Per
Order
UNPL
Apples to apples sample batches are nearly impossible in our business however
accounted for as best as possible using number of lines per order and like items.
Before X-Docking:
In addition to the initial put away time, this process entailed travel/transport time to
include the need for a forklift, search/picking time, packing time, and quality assurance.
After Implementation:
Picking occurred at the new floor locators adjacent to the receiving stations and the QA
phase was combined with the packing stage.
Results:
Average pick-to-pack time per order decreased from 12.2 to 6.4 minutes per order.
The differences between the UNPL and LNPLs reduced from 14.6 to 12.8 indicating a12% reduction in routine variation.
Since previously limiting factors did not allow all orders to be shipped the same day,
the overall increase in the number of orders shipped per day has saved approximately
1.5 days on the supply chain (this figure is subject to improve given seasonality).
0.00
5.00
10.00
15.00
1 2 3 4 5 6 7 8 9 10
Total Time
(minutes)
Avg Time Per
Order
Changes in Purchasing procedure will allow for more orders to be cross-docked via
segregation of shipments.
To be weighed against a potential marginal increase in inbound freight costs.
Changes in sales strategy would reduce the number of orders needed to be put awayallowing for more orders to either be drop-shipped or cross-docked