introduction to lean (handout)

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Introduction Introduction to to

LEANLEAN“Not Just for Manufacturing Anymore”“Not Just for Manufacturing Anymore”

Mike McDermott 804-248-1837 [email protected] www.SmallBusinessCoachVA.com

FINALLY! FINALLY! It’s official, we’ve been in a It’s official, we’ve been in a recession for 11 months! recession for 11 months!

What a surprise! What a surprise!

Now…what can you do to help your Now…what can you do to help your organization respond?organization respond?

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�� Bank of America has saved $2 Billion over the past six yearsBank of America has saved $2 Billion over the past six years�� TOYOTA has surpassed General Motors as the largest (and still TOYOTA has surpassed General Motors as the largest (and still

profitable) auto manufacturer in the world and NOT with styling!.profitable) auto manufacturer in the world and NOT with styling!.�� State of Iowa Department of Natural Resources reduced processing State of Iowa Department of Natural Resources reduced processing

time for air quality new source construction permits from 62 days to time for air quality new source construction permits from 62 days to 6 days.6 days.

�� Iowa Veteran’s Home in their pharmacy process reduced delays by Iowa Veteran’s Home in their pharmacy process reduced delays by 68%; reduced processing steps by 27%; decisions reduced 58%; 68%; reduced processing steps by 27%; decisions reduced 58%; handoffs reduced 69%. handoffs reduced 69%.

�� Menlo Worldwide Logistics in San Mateo, CA (outsourced Menlo Worldwide Logistics in San Mateo, CA (outsourced warehousing and receiving) boosted inventory accuracy from 60% to warehousing and receiving) boosted inventory accuracy from 60% to 99%; slashed the value of inventories by 26%; reduced parts 99%; slashed the value of inventories by 26%; reduced parts shortages by 90%, and eliminated 95% of its expedited freight costs.shortages by 90%, and eliminated 95% of its expedited freight costs.

�� A Canadian Post office reduced floor operating space by 56%, cut A Canadian Post office reduced floor operating space by 56%, cut headcount by ½, increased productivity by 24%, headcount by ½, increased productivity by 24%,

�� Columbus, Ohio, Public School system is applying LEAN tools such as Columbus, Ohio, Public School system is applying LEAN tools such as process and value stream mapping to improve their No Child Left process and value stream mapping to improve their No Child Left Behind performance. Behind performance.

�� Even the U.S. Army is improving their productivity and mission Even the U.S. Army is improving their productivity and mission effectiveness.effectiveness.


Improvements like these are being achieved Improvements like these are being achieved in production AND service organizations in production AND service organizations everyday through the implementation of everyday through the implementation of

LEANLEAN principles and tools.principles and tools.

Financial improvements that can be realized Financial improvements that can be realized

within weeks or even days with little cost.within weeks or even days with little cost.

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What is LEAN?What is LEAN?LEAN is a business strategy and tool box that seeks to:LEAN is a business strategy and tool box that seeks to:

�� Eliminate every kind of waste Eliminate every kind of waste

�� Minimize processing time Minimize processing time

�� Improve process and services flowImprove process and services flow

“A philosophical and pragmatic approach to business, focused upon processes, that is driven by internal and external customer needs by producing quality products and offering superior services that are just what customers need, when they need them, in only the quantity required, using the minimum of materials, equipment, space, labor and time.”

One definition of LEAN:


Potential Improvements from LEAN ProjectsPotential Improvements from LEAN Projects

Key cost elements Benchmark Savings

Typical improvement results from a LEAN Project in a manufacturing environment

Typical improvement results from a LEAN Project in a white collar environment

Key cost elements Benchmark Savings

25% 50% 75% 100%0%

Revenue Growth

Cycle Time

25% 50% 75% 100%0%

Direct Labor

Raw Material

Defects

Inventory

Supplier Cost

Floor Space

Total Recurring Costs

Support/ Overhead Labor

Cycle Time

Labor/Personnel

Supplies

Errors/Poor Quality

Value-add/employee

Vendor Management

Information Handoffs

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Where Does “LEAN” Come From?Where Does “LEAN” Come From?

�� Term coined by James Womack in his 1990 book Term coined by James Womack in his 1990 book “The Machine that Changed the World” “The Machine that Changed the World” about about auto manufacturing and the Toyota Production auto manufacturing and the Toyota Production System. System. "The fundamentals of this system are applicable to every industry "The fundamentals of this system are applicable to every industry across the globe...[and] will have a profound impact on human society. It will truly across the globe...[and] will have a profound impact on human society. It will truly change the world." change the world." ---- New York Times MagazineNew York Times Magazine

�� LEAN is not an acronym for anything…just LEAN is not an acronym for anything…just means what it says: thin, spare, concise, means what it says: thin, spare, concise, succinct, focused, efficient, effective. succinct, focused, efficient, effective.

�� The hallmarks of LEAN are teamwork, common The hallmarks of LEAN are teamwork, common sense, communication and efficient use of sense, communication and efficient use of resourcesresources


So, Why is LEAN Important?So, Why is LEAN Important?

Empirical data shows that 30%Empirical data shows that 30%--80% of the 80% of the cost of providing a service (and as much as cost of providing a service (and as much as 95% of the cost of manufacturing a product) 95% of the cost of manufacturing a product) is waste…things that the customer doesn’t is waste…things that the customer doesn’t

want to pay for. want to pay for.

Every penny of waste that is eliminated goes directly and immediately to profit and

also improves customer service and satisfaction.

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1.1. DEFINED VALUEDEFINED VALUE -- anything the customer is willing anything the customer is willing to pay for. Valueto pay for. Value--added or nonadded or non--valuevalue--addedadded

2.2. IDENTIFY VALUE STREAMIDENTIFY VALUE STREAM -- all the activities all the activities required to design, order, make, and deliver a required to design, order, make, and deliver a product or service to the hands of the customer.product or service to the hands of the customer.

3.3. FLOWFLOW -- value stream with no stoppages, scrap, or value stream with no stoppages, scrap, or backflows.backflows.

4.4. PULLPULL –– reverse cascading (downstream to reverse cascading (downstream to upstream) of material and information activities upstream) of material and information activities where nothing is produced by the upstream where nothing is produced by the upstream supplier until the downstream customer signals for supplier until the downstream customer signals for it.it.

5.5. PERFECTIONPERFECTION –– the complete elimination of waste the complete elimination of waste so that all activities along a value stream create so that all activities along a value stream create value.value.

5 Principles of LEAN5 Principles of LEAN


What is “NonWhat is “Non--ValueValue--Added” or waste?Added” or waste?

Any activity that adds no real value from a customer viewpoint (e.g., Order entry/processing, entering G/L transactions, etc.) and is not required for financial, legal or other business reasons. If you STOPPED doing an activity, would any customers, internal or external, complain or notice a difference? If not, then it is likely a Non-Value-Added activity

What is “ValueWhat is “Value--Added”?Added”?

�� Any activity within a process that is essential to delivering the service or product to the Any activity within a process that is essential to delivering the service or product to the customercustomer

�� Performed in order to meet customer requirementsPerformed in order to meet customer requirements

�� Adds form or feature to the product or serviceAdds form or feature to the product or service

�� Enables onEnables on--time or more competitive delivery, or has a positive impact on price time or more competitive delivery, or has a positive impact on price competitioncompetition

�� Customers would pay for this work if they knew you were doing it because it Customers would pay for this work if they knew you were doing it because it enhances product or service qualityenhances product or service quality

�� If you STOP doing an activity would your external or endIf you STOP doing an activity would your external or end--customer complain? If so, then customer complain? If so, then it is likely a Valueit is likely a Value--Added activityAdded activity

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Seven Deadly Wastes

Excessive

Motion

Waiting

Time

Overproductio

n

Unnecessary

Processing TimeDefects

Excessive

Inventory

Unnecessary

Transportation

Blue Collar or Manufacturing

Environment

WasteWaste>95%>95%

<5%

White Collar or Services

Environment

Searching for

information

Rework

Approval

Wait Time

Meetings &

Conference

Calls

Value-

Added

Project

Work

~35%

Other

Value-

Added

Project

Work

BlueCollar

WhiteCollar

Excessive

Motion

Waiting

TimeErrors

Unnecessary

Handoffs

Unnecessary

Processing Time

LEAN seeks to eliminate all forms of waste LEAN seeks to eliminate all forms of waste throughout the entire organizationthroughout the entire organization

Over-

EngineeringExcessive

Resources


When You Understand Which Activities are ValueWhen You Understand Which Activities are Value--Added Added and Which are Nonand Which are Non--ValueValue--Added…Added…

Focus your efforts on improving and maximizing your internal value-added activities

Consider minimizing or outsourcing your nonConsider minimizing or outsourcing your non--valuevalue--added added activities. activities.

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LEAN TOOLSLEAN TOOLSIn general:In general:�� Are focused on using internal employee Are focused on using internal employee

“experts” and teams so external expert time is “experts” and teams so external expert time is minimal. “minimal. “Nobody in their 25 sq ft of workspace knows how to Nobody in their 25 sq ft of workspace knows how to do a job better than the employee doing it”.do a job better than the employee doing it”.

�� Can be implemented quickly and achieve results Can be implemented quickly and achieve results within days or weeks.within days or weeks.

�� Are mostly common sense and easy to learn and Are mostly common sense and easy to learn and use.use.

�� Are inexpensive, with a focus upon “get it done Are inexpensive, with a focus upon “get it done today with what we have”. today with what we have”.


5S 5S –– Workplace OrganizationWorkplace Organization�� WHATWHAT –– a method to eliminate unnecessary items and organize any workspace, a method to eliminate unnecessary items and organize any workspace,

standardize the work, maintain good housekeeping and sustain positive changes. The standardize the work, maintain good housekeeping and sustain positive changes. The “S’s” refer to five Japanese words describing the five following activities:“S’s” refer to five Japanese words describing the five following activities:

�� HOWHOW�� Remove ALL unnecessary items in a workspaceRemove ALL unnecessary items in a workspace�� CleanClean--up and make everything SHINE (people who work in a toilet up and make everything SHINE (people who work in a toilet

produce #!@$#). (This same principle explains why school produce #!@$#). (This same principle explains why school uniforms improve student performance and why cleaning away uniforms improve student performance and why cleaning away graffiti and fixing broken windows in N.Y. reduced crime). graffiti and fixing broken windows in N.Y. reduced crime).

�� Find and Find and markmark a place for everything remaining in the workspace. a place for everything remaining in the workspace. Use visual management: label everything, use colorUse visual management: label everything, use color--coding, etc. coding, etc.

�� Standardize Standardize best practices; write them down and best practices; write them down and followfollow them; use them; use checklistschecklists. . Measure and track performance. Measure and track performance.

�� Maintain Maintain the standards, practice continuous improvement, the standards, practice continuous improvement, perpetual inspection and housekeeping.perpetual inspection and housekeeping.

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Value Stream Mapping Value Stream Mapping & Process Flow Analysis& Process Flow Analysis

�� WHAT:WHAT:�� A tool to identify waste & nonA tool to identify waste & non--valuevalue--added steps in a process. added steps in a process. �� Identifies the flow of material, service, information, customer contact.Identifies the flow of material, service, information, customer contact.�� Used to improve speed and continuous flow, eliminate wasteUsed to improve speed and continuous flow, eliminate waste

�� HOW:HOW:�� Scope a “core process” or operational “bottleneck”Scope a “core process” or operational “bottleneck”�� Form an internal team of internal “experts”, from the scoped process, Form an internal team of internal “experts”, from the scoped process,

up and downstream processes, management, staff (6up and downstream processes, management, staff (6--8 people).8 people).�� Train in problem identification/solving tools, LEAN techniques.Train in problem identification/solving tools, LEAN techniques.�� Measure “current state”, take photos.Measure “current state”, take photos.�� Draw a diagram/map the flow, steps, information flow, etcDraw a diagram/map the flow, steps, information flow, etc�� Remove nonRemove non--valuevalue--added steps, bottlenecks, unnecessary approvals, added steps, bottlenecks, unnecessary approvals,

etc.etc.�� Dry run the new process, look for upstream & downstream “issues”.Dry run the new process, look for upstream & downstream “issues”.�� Implement the changes and “institutionalize”.Implement the changes and “institutionalize”.�� Measure the “new state” process, take photos, gage resultsMeasure the “new state” process, take photos, gage results�� Celebrate!Celebrate!


RootRoot--Cause Analysis Cause Analysis �� WHAT WHAT –– a problem solving toola problem solving tool

�� HOWHOW�� Ask “Why” , then ask “Why” again five timesAsk “Why” , then ask “Why” again five times

�� Problem: The Washington Monument was disintegrating. Problem: The Washington Monument was disintegrating.

�� Why? Because of maintenance with harsh chemicals. Why? Because of maintenance with harsh chemicals.

�� Why do they need harsh chemicals? To clean pigeon poop. Why do they need harsh chemicals? To clean pigeon poop.

�� Why so many pigeons? Pigeons eat spiders and there are a lot of Why so many pigeons? Pigeons eat spiders and there are a lot of spiders at the monument. spiders at the monument.

�� Why so many spiders? Spiders eat gnats and there are lots of Why so many spiders? Spiders eat gnats and there are lots of gnats at the monument. gnats at the monument.

�� Why so many gnats? Gnats are attracted to the light at dusk.Why so many gnats? Gnats are attracted to the light at dusk.

�� Solution: Turn on the monument illumination at a later time Solution: Turn on the monument illumination at a later time

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Cause & Effect/Fishbone/Ishikawa DiagramCause & Effect/Fishbone/Ishikawa Diagram

�� WHAT WHAT –– a problem solving toola problem solving tool�� HOWHOW

�� Identify issues caused by Methods, Machines, Identify issues caused by Methods, Machines, Materials, Manpower, Place, Procedure, People, Materials, Manpower, Place, Procedure, People, Policies, Surroundings, Suppliers, Systems, SkillsPolicies, Surroundings, Suppliers, Systems, Skills


BrainstormingBrainstorming

�� WHAT WHAT –– an idea generation/problem solving toolan idea generation/problem solving tool�� HOWHOW

�� Assemble a relevant & diverse employee group, no more than 20Assemble a relevant & diverse employee group, no more than 20�� Very clearly define a specific problem/narrow issue. Very clearly define a specific problem/narrow issue. �� Participants spend 5Participants spend 5--10 min writing down ideas with no 10 min writing down ideas with no

discussion.discussion.�� Go around the room once and ask for ideas. Open the Go around the room once and ask for ideas. Open the

discussion for rebound ideas. discussion for rebound ideas. �� All ideas are written on white board/flip chartsAll ideas are written on white board/flip charts�� No criticism of ideas. No criticism of ideas. �� Encourage “freeEncourage “free--wheeling”.wheeling”.�� Go for quantity, not quality during the generation phase.Go for quantity, not quality during the generation phase.�� Limit the session to one hour.Limit the session to one hour.�� Combine and improve on ideas after idea generation.Combine and improve on ideas after idea generation.�� Prioritize ideas and create an action plan.Prioritize ideas and create an action plan.

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F.M.E.A.F.M.E.A.

�� WHAT WHAT –– Failure Mode & Effects Analysis. An analytical method to Failure Mode & Effects Analysis. An analytical method to

identify and prioritize real and potential product or service problems.identify and prioritize real and potential product or service problems.

�� HOWHOW�� Form a team of internal employee experts on the problem/processForm a team of internal employee experts on the problem/process�� Clearly define the problem using cause & effect diagrams, flow analysis, etc. Clearly define the problem using cause & effect diagrams, flow analysis, etc. �� Brainstorm ALL potential failure reasons/modes, then group and combine.Brainstorm ALL potential failure reasons/modes, then group and combine.�� List failure modes on a FMEA worksheet.List failure modes on a FMEA worksheet.�� For EACH failure mode, list the potential effects of a failure.For EACH failure mode, list the potential effects of a failure.�� For each failure mode, assign a relative severity rating.For each failure mode, assign a relative severity rating.�� For each failure mode, assign a frequency/occurrence ratingFor each failure mode, assign a frequency/occurrence rating�� For each failure mode, assign a detection rating (how likely/easily can it be For each failure mode, assign a detection rating (how likely/easily can it be

detected).detected).�� Calculate a risk priority number for each mode considering the severity, Calculate a risk priority number for each mode considering the severity,

frequency and detection rating and prioritize the failure modes from highest to frequency and detection rating and prioritize the failure modes from highest to lowest.lowest.

�� Work to correct/prevent the highest priority issuesWork to correct/prevent the highest priority issues

�� Institutionalize the solutions and 5S.Institutionalize the solutions and 5S.


MistakeMistake--Proofing (PokaProofing (Poka--yoke)yoke)

�� WHAT WHAT –– the use of tools or procedures to stop errors or defects the use of tools or procedures to stop errors or defects BEFORE they occur and make it impossible for them to occur.BEFORE they occur and make it impossible for them to occur.

�� EXAMPLESEXAMPLES�� You cannot fill your unleaded gas tank with leaded gas. On You cannot fill your unleaded gas tank with leaded gas. On

most clothes dryers, the lint trap will only go in one way, the most clothes dryers, the lint trap will only go in one way, the proper way.proper way.

�� Other examples: warning lights; automatic machine shutdown Other examples: warning lights; automatic machine shutdown when a quality parameter is exceeded; colorwhen a quality parameter is exceeded; color--coding; checklists; coding; checklists; bar codes; fastbar codes; fast--food cash registers with pictures of the food.food cash registers with pictures of the food.

�� HOWHOW�� Clearly define the defect or error and locate the process step where Clearly define the defect or error and locate the process step where

it occurs.it occurs.�� Investigate and determine the root cause; use FMEA.Investigate and determine the root cause; use FMEA.�� Brainstorm ideas to detect or eliminate the problemBrainstorm ideas to detect or eliminate the problem

�� Create, test, validate and implement the mistakeCreate, test, validate and implement the mistake--proofing device.proofing device.

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V.O.C. (Voice of the Customer)V.O.C. (Voice of the Customer)

�� WHAT WHAT –– several tools to discover & prioritize what customers care several tools to discover & prioritize what customers care aboutabout

�� HOWHOW�� Customer Segmentation Customer Segmentation –– not all customers create equal value not all customers create equal value

for the organization. Focus on subgroups that generate highest value.for the organization. Focus on subgroups that generate highest value.

�� Customer Data Collection: Customer Data Collection: Interviews, pointInterviews, point--ofof--use observation, use observation, focus groups, surveys. focus groups, surveys.

�� Kano Analysis/Chart Kano Analysis/Chart –– identifies varying levels of value that identifies varying levels of value that customers place on different features of your product/service by customers place on different features of your product/service by considering dissatisfiers, satisfiers and delighters.considering dissatisfiers, satisfiers and delighters.

�� Develop “CriticalDevelop “Critical--toto--Quality” RequirementsQuality” Requirements�� Collect VOC dataCollect VOC data�� Use Affinity Diagrams to groupUse Affinity Diagrams to group

Voice of the CustomerVoice of the Customer The “Why” The “Why” (After Clarification)(After Clarification)

Critical Customer Critical Customer RequirementRequirement

“I hate dealing with “I hate dealing with your company”your company”

Products are not Products are not delivered on timedelivered on time

1010--day lead timeday lead time


MeasurementMeasurement�� WHAT WHAT –– “You cannot manage something you cannot control and “You cannot manage something you cannot control and

you cannot control something you cannot measure.”you cannot control something you cannot measure.” Peter DruckerPeter Drucker

“In GOD we trust, all others bring data”“In GOD we trust, all others bring data” W. Edwards DemingW. Edwards Deming

“ What gets measured gets done; what gets measured and fed back “ What gets measured gets done; what gets measured and fed back gets done well; what gets rewarded gets repeated.” gets done well; what gets rewarded gets repeated.” John E. JonesJohn E. Jones

�� HOWHOW�� Develop leading & lagging metrics for Develop leading & lagging metrics for EVERYEVERY

organizational, team, individual organizational, team, individual key success factorkey success factor..�� Benchmark your metrics against your direct Benchmark your metrics against your direct

competition and against the industry best.competition and against the industry best.�� Give people public feedback weeklyGive people public feedback weekly�� Clearly differentiate in favor of good performance.Clearly differentiate in favor of good performance.

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Employee EngagementEmployee Engagement

�� WHAT WHAT –– nobody ever washes a rented car. Why are you surprised that nobody ever washes a rented car. Why are you surprised that people complain about their pay when money is the only reason you give them people complain about their pay when money is the only reason you give them to come to work? OWNERS think differently than hired hands/mercenaries. to come to work? OWNERS think differently than hired hands/mercenaries. Employees admit to working at only about 70% of capacity.Employees admit to working at only about 70% of capacity.

�� HOWHOW�� Teach employees about your business model (how you make a profit), Teach employees about your business model (how you make a profit),

about the key success factors of your business and about profit/loss as it about the key success factors of your business and about profit/loss as it applies to your business.applies to your business.

�� Ask them for ways to help save money. Start a paid suggestion program.Ask them for ways to help save money. Start a paid suggestion program.�� Involve employees in your VoiceInvolve employees in your Voice--ofof--thethe--Customer profiling. Engage nonCustomer profiling. Engage non--

sales “social leader” employees onesales “social leader” employees one--onon--one with customers.one with customers.�� Create a “competitive intelligence” program and involve all employees. Create a “competitive intelligence” program and involve all employees.

(How much do you really know about your competitors? How can you (How much do you really know about your competitors? How can you differentiate if you don’t know their strengths and weaknesses?)differentiate if you don’t know their strengths and weaknesses?)

�� Communicate frequently. Ask employees for their opinions and ideas.Communicate frequently. Ask employees for their opinions and ideas.�� “Manage by wandering around”.“Manage by wandering around”.


S.M.E.D./SetS.M.E.D./Set--up Reductionup Reduction

�� WHAT WHAT –– single minute exchange of dies. Used in manufacturing to single minute exchange of dies. Used in manufacturing to quickly replace dies in stamping, drilling and other continuous operation quickly replace dies in stamping, drilling and other continuous operation machinery. Example: a four hour setmachinery. Example: a four hour set--up change can be reduced to three up change can be reduced to three minutes. YES, it minutes. YES, it doesdoes apply to service operations because the SMED tool apply to service operations because the SMED tool identifies steps or processes that could, potentially, be outsourced. identifies steps or processes that could, potentially, be outsourced.

�� HOWHOW�� Document all aspects of the machine setDocument all aspects of the machine set--upup�� Separate “internal” setSeparate “internal” set--up (operations that must be performed when the up (operations that must be performed when the

machine is stopped) from “external” setmachine is stopped) from “external” set--up (operations which can be up (operations which can be performed when the machine is running).performed when the machine is running).

�� Convert internal setConvert internal set--up functions to external functions.up functions to external functions.�� Generate ideas for reducing external setGenerate ideas for reducing external set--ups.ups.�� Generate ideas for reducing internal setGenerate ideas for reducing internal set--ups.ups.�� Evaluate and test new ideas.Evaluate and test new ideas.�� Prepare for changeover using the new ideasPrepare for changeover using the new ideas�� Standardize & document the new bestStandardize & document the new best--practices.practices.�� Continuously improve the process as conditions, products and equipment Continuously improve the process as conditions, products and equipment

change. change.

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Work CellsWork Cells

�� WHAT WHAT –– reorganizing “functional departments” into employee teams reorganizing “functional departments” into employee teams based around products, services, core processes. Improves communication, based around products, services, core processes. Improves communication, minimizes “handminimizes “hand--off” problems, shortens wait and decision time, reduces off” problems, shortens wait and decision time, reduces space.space.

�� HOWHOW�� Define/identify the 20% of products or services that are responsible for the Define/identify the 20% of products or services that are responsible for the

80% of your profits. (Parteo Principle)80% of your profits. (Parteo Principle)�� Map/diagram the value stream/process flow of the individual Map/diagram the value stream/process flow of the individual

products/services from order to customer delivery including the people, products/services from order to customer delivery including the people, workspaces, communication, information. Spaghetti diagrams can be workspaces, communication, information. Spaghetti diagrams can be useful here.useful here.

�� Perform flow analysis, waste elimination and process flow improvement. Perform flow analysis, waste elimination and process flow improvement. �� Use small, inexpensive and flexible/moveable equipmentUse small, inexpensive and flexible/moveable equipment�� Standardize operations.Standardize operations.�� Where possible, physically group together the people on the individual Where possible, physically group together the people on the individual

focused teams. Crossfocused teams. Cross--train team members.train team members.�� Use an open “bullUse an open “bull--pen” work area with peripheral private rooms for pen” work area with peripheral private rooms for

meetings or quiet space.meetings or quiet space.


KAIZENKAIZEN

�� WHAT WHAT –– an employeean employee--centric operating philosophy that every centric operating philosophy that every process can and should be continually evaluated and improved. process can and should be continually evaluated and improved. Continuous small, incremental improvements. Continuous small, incremental improvements. It’s difficult to make It’s difficult to make one thing 1000% better. But it’s easy for every employee to make one thing 1000% better. But it’s easy for every employee to make 1000 things 1% better. 1000 things 1% better.

�� HOWHOW�� A daily activity where individual employees are empowered to A daily activity where individual employees are empowered to

make suggestions for changes in their work, process, standards, make suggestions for changes in their work, process, standards, workspace, tools, etc.workspace, tools, etc.

�� LargeLarge--scale projects and extensive changes are replaced by scale projects and extensive changes are replaced by smaller experiments and incremental changes which can be smaller experiments and incremental changes which can be rapidly adapted as employees suggest and test them.rapidly adapted as employees suggest and test them.

�� A culture of many continual aligned small improvements and A culture of many continual aligned small improvements and standardization of beststandardization of best--practices yields large results in the form practices yields large results in the form of compound productivity improvement.of compound productivity improvement.

�� Role of Supervisor becomes a trainer, resource provider, Role of Supervisor becomes a trainer, resource provider, improvement facilitator rather than a “guard”.improvement facilitator rather than a “guard”.

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KAIZEN Blitz KAIZEN Blitz (aka Rapid Breakthrough Improvement Event)(aka Rapid Breakthrough Improvement Event)

�� WHAT WHAT –– the quickest and most costthe quickest and most cost--effective method to make effective method to make significant cost reductions, productivity, process, customer satisfaction significant cost reductions, productivity, process, customer satisfaction and other organizational performance improvements. and other organizational performance improvements.

�� HOWHOW�� Intensive 3Intensive 3--5 day, full5 day, full--time, teamtime, team--based improvement event.based improvement event.

�� Clearly defined objective of limited scope on a poorly performing Clearly defined objective of limited scope on a poorly performing organizational key success factor.organizational key success factor.

�� Kaizen team of 6Kaizen team of 6--8 employees including two from the targeted area, 8 employees including two from the targeted area, up and downstream process, management, support areas.up and downstream process, management, support areas.

�� Team training on LEAN toolsTeam training on LEAN tools�� Prepare “asPrepare “as--is” value stream map, collect measurements, photos.is” value stream map, collect measurements, photos.�� Perform problemPerform problem--solving, root cause, flow analysis, waste solving, root cause, flow analysis, waste

elimination, brainstorm improvements, etc. elimination, brainstorm improvements, etc. �� Create improvement plan, “newCreate improvement plan, “new--state” map, dry run process, create state” map, dry run process, create

new tools, train employees, implement physical changes, etcnew tools, train employees, implement physical changes, etc�� Document and sustain changes, report to management, celebrate.Document and sustain changes, report to management, celebrate.


Some Other LEAN Tools Some Other LEAN Tools

�� Total Productive Maintenance (TPM) Total Productive Maintenance (TPM) –– reduces reduces unscheduled equipment downtime through preventive maintenanceunscheduled equipment downtime through preventive maintenance

�� JustJust--inin--Time Time –– a scheduling concept that calls for a part or a scheduling concept that calls for a part or service only when it is needed and not earlier or later (which reduces service only when it is needed and not earlier or later (which reduces inventory and space).inventory and space).

�� Hoshin PlanningHoshin Planning –– a management strategy deployment approach for a management strategy deployment approach for establishing goals (and supporting policies) and ensuring that they are the establishing goals (and supporting policies) and ensuring that they are the primary focus of the organization.primary focus of the organization.

�� PDCAPDCA –– a problema problem--solving methodology that utilizes: PLAN, DO, CHECK, solving methodology that utilizes: PLAN, DO, CHECK, ACT. ACT.

�� Six Sigma Six Sigma –– a management system in its own right that focuses a management system in its own right that focuses upon dramatically improving quality and service through measurement upon dramatically improving quality and service through measurement and reduction of process variability. and reduction of process variability.

�� TRIZ TRIZ –– a theory of inventive problem solving using 9 action steps a theory of inventive problem solving using 9 action steps and 40 basic principles (very cool!)and 40 basic principles (very cool!)

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Where to Begin? Where to Begin?

�� You can begin to improve profits TODAY and see results by the end of You can begin to improve profits TODAY and see results by the end of your next accounting period. Start with the four ways to increase your next accounting period. Start with the four ways to increase profits: increase prices, sell more, reduce costs, improve productivity. profits: increase prices, sell more, reduce costs, improve productivity.

�� Select and precisely define a problem through brainstorming or Select and precisely define a problem through brainstorming or identifying a process bottleneck, your most frequent customer identifying a process bottleneck, your most frequent customer complaint, a quality or service problem or a feature where you are not complaint, a quality or service problem or a feature where you are not competitive with your biggest competitor. What is your biggest competitive with your biggest competitor. What is your biggest reoccurring problem? There IS a solution…you’ve just lived with it for reoccurring problem? There IS a solution…you’ve just lived with it for so long that you have given up and have accepted it as unsolvable. so long that you have given up and have accepted it as unsolvable.

�� Form a team of internal employees including one or two from the Form a team of internal employees including one or two from the problem area, up and downstream process employees, managers and problem area, up and downstream process employees, managers and staff. Some organizations call in vendors and even customers to be on staff. Some organizations call in vendors and even customers to be on the team. the team.

�� Use problemUse problem--solving techniques such as the “5 Whys”, cause & effect solving techniques such as the “5 Whys”, cause & effect diagrams, VOC, value stream/process mapping, FMEA. diagrams, VOC, value stream/process mapping, FMEA.

�� Conduct a KAIZEN event to study and reConduct a KAIZEN event to study and re--invent the process or fix the invent the process or fix the problem and implement a solution. problem and implement a solution.


Nothing is ImpossibleNothing is ImpossibleThe biggest barrier to your organization’s survival or growth in this The biggest barrier to your organization’s survival or growth in this recessionary period does NOT lie in external economic or customer or recessionary period does NOT lie in external economic or customer or sales factors. Your biggest barrier to success is surrendering to the sales factors. Your biggest barrier to success is surrendering to the helpless feeling that you cannot make a difference. The LEAN helpless feeling that you cannot make a difference. The LEAN improvement tools are all common sense, easy to learn and cost improvement tools are all common sense, easy to learn and cost virtually nothing except employee time to implement. The solutions virtually nothing except employee time to implement. The solutions to your organizational performance problems are already in the to your organizational performance problems are already in the hearts and minds of your employees, waiting to be liberated. Your hearts and minds of your employees, waiting to be liberated. Your employees, at every level, are today motivated and want your employees, at every level, are today motivated and want your organization to survive so they can keep their jobs. And, at a higher organization to survive so they can keep their jobs. And, at a higher place in their hearts, they want to be part of something special, a place in their hearts, they want to be part of something special, a crusade where common people came together for a lifecrusade where common people came together for a life--oror--death death purpose and ended by creating an uncommon and extraordinary purpose and ended by creating an uncommon and extraordinary achievement. And wouldn’t you, at the end of your days sitting on achievement. And wouldn’t you, at the end of your days sitting on your porch watching the sun go down with a cocktail in your hand, your porch watching the sun go down with a cocktail in your hand, want to proudly reflect back upon one of the most memorable times want to proudly reflect back upon one of the most memorable times in your life where you stood up, looked your employees or coworkers in your life where you stood up, looked your employees or coworkers straight in the eyes and, with passion and conviction, said “We can straight in the eyes and, with passion and conviction, said “We can do this and I know how”. This is the time; this is THE WAY and it do this and I know how”. This is the time; this is THE WAY and it will not get done if YOU don’t do it. will not get done if YOU don’t do it.

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Some LEAN Related WebsitesSome LEAN Related Websites

industryweek.comindustryweek.comlean.orglean.orgkaizenkaizen--institute.cominstitute.comlean.mit.edulean.mit.edusme.orgsme.orgshingoprize.orgshingoprize.org

productivitypress.comproductivitypress.com

productivityinc.comproductivityinc.com

superfactory.comsuperfactory.comtpmonline.comtpmonline.comenews@ame.orgenews@ame.orgleanhealthcare.comleanhealthcare.comisixsigma.comisixsigma.com

ame.orgame.org


ReadRead

LEAN Six Sigma for ServiceLEAN Six Sigma for ServiceMichael L. GeorgeMichael L. George

McGraw Hill, 2003McGraw Hill, 2003

(Ask me for a “Top 10” LEAN bibliography)(Ask me for a “Top 10” LEAN bibliography)

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Every business can improve profits cost-effectively. These simple and D.I.Y. “tune-up” strategies and tools can add dramatically to your bottom line before

your next quarterly reporting period. If you would like details about the information contained in this presentation or a free consultation on a customized tune-up plan for your organization call us:

Mike McDermott804-248-1837

[email protected]