lean enterprise initiative

Lean Enterprise Initiative Overview and Approach

Copyright 2011 WillowTree Advisors , All rights reserved. Lean Enterprise Initiative Approach 2

Agenda

Overview

Approach

Timeline

Pricing

Summary

Overview


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Lean Enterprise Initiative

“Words”


Company Overview

Denver Based Business Consulting Firm

• Business and technology strategy

• Transformation

• Optimization of internal assets (people and

technologies)

Our goal: provide access to expert knowledge

and consulting at a reasonable price

Certified WOSB

Over 30 professional consultants

• Certified in Lean, Six Sigma, PMI, TQM

• Experienced w/industry standards such as

ITIL, CMMI, ISO 9000/9001 and Baldrige

Recent Customers

Local Customers

State of Colorado OIT

Arapahoe County Public Works

Arapahoe County IT

Western Disposal

Denver Water

CO Dept of Natural Resources

National Customers

Tate and Lyle

EMC

Regis Corp

Acadia

GSA (MOBIS)

Fast Flexible Focused


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Lean Project Experience

Teleflex Medical

Center Partners

Veterans Affairs

Medical Center

BHP Billiton

Private Escapes

General Dynamics

Covidien Denver Health

BNSF

Rainbird

Brambles

INTREX


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Desired Outcomes

Satisfied and Supportive Customers

Financially Strong and

Stable Orgnization

Strategically Effective

Relationships and

Reputation

An Efficient, Effective and Strategically

Driven Organization

* Source : Client 2011 Strategic Plan

Increased Customer Satisfaction and

Engagement Increased Employee Engagement

Reduced Waste Increased Productivity

Quantifiable Results Tied to the Strategy


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Current Situation

Increasingly

Stringent

Regulations Population

Growth

Conservation

Rising Operating Costs

Wage Pressures

Flat /Decreasing Revenues

Sluggish Economy

Risk of Reduced Service Levels


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The Challenge

“70% of change initiatives fail.”

Michael Beer, and Nintin Nohria, Harvard Business Review

Success

Leadership

Commitment

Solid

Execution

Stakeholder

Communication

Employee

Engagement

Choose Your Team Wisely


The “Words”

Lean – An approach for business

process improvement with a focus on

reducing waste in time, inventory and

manpower

Sensei or Lean Expert – A person who

has significant training and experience

with Lean tools, implementations and

strategy

A3 or Storyboard - A format for telling

a story, or reporting results and/or

status on a single page

Black Belt or Lean Facilitator – An

expert in Lean methods who works

with teams to help them apply Lean

methods and tools to business

process improvement activities

Value Stream – A key business

process that delivers a value (service

or product) to the customer.

Kaizen Event/RIE or Focus Event –

One of several kinds of business

improvement projects – focused on a

weeklong improvement workshop


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`

De

plo

yme

nt

Ad

op

tio

n

Go

vern

an

ce

S

tra

teg

y

18-24 months+

WTA Lean Transformation Framework - FLEX TM

JumpStart Traction Expand Sustain

• Form VS Teams

• Implement

Governance

Structure

• Track /Report

• Assess and Align

• Identify and

Prioritize Value

Streams

• Define KPIs

• Conduct Value

Stream

Analyses for

25%

• Design

Infrastructure

• KPI/Metrics

• Governance

Structure

• Templates

• Design Approach

• Training

• Communication

• Change Mgmt

• Conduct Training

• Complete

Training Rollout

• Employee

Engagement/

Recognition

• Conduct Pilot

• Evaluate

Results

• Followup

• Implement

Adoption

Approach

• Rollout Comm,

Training

• Rollout Lean

Process to

25% of Scope

• Rollout Lean

Process to

50% of Scope

• Rollout Lean

Process to

100% of Scope

• Expand Training

and

Communication

• Professional

Development

• Conduct VSAs for

50%

• Calibrate Strategic

Alignment

• Conduct VSAs

for 100%

• Review and

Renew

• Expand VS

Teams

• Track and

Report Results

• Update Pgm

• Expand VS

Teams

• Track and

Report Results

• Accountability

Program Management


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Phase One - Alignment

Alignment Phase Duration Activities/ Deliverables Target

Completion Date

Jump Start

8 Weeks Program/Phase Logistics

Review of Key Materials

Executive Alignment Session

• Identify Key Business Processes

• Identify, Select & Prioritize Value

Streams

Infrastructure Design

• Governance

• Communications

• Training and Change Mgmt

Implementation Approach

Conduct Pilot

Phase One Summary Report

Month 2

What starts right, stays right.


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Phase Two - Implementation

Implementation

Phase

Duration Activities/ Deliverables Target Completion

Date

Traction 12 - 18

months

Program Framework, Governance and

Infrastructure Implementation

• Communications, Training and Change

Management Plans

• Tracking /Measurement/ Reporting/

Problem Solving Tools, Templates and

Processes

Value Stream Analysis and Mapping

Workshops

Lean Team/Facilitators Training

Focus Event Facilitation and Report Outs

Workforce Orientation

Quarterly Reviews / w Lean Expert (s)

Month 3 - 20

Early traction drives success.


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Phase Two - Implementation

Implementation Phase Duration Activities/ Deliverables

Expand 18 - 24

months

Continuation of Traction Deliverables, as requested

Periodic/on-request support, coaching, training and

quality reviews as requested


Sustain 18 - 24

months+

Periodic/on-request support, coaching and quality


“Do or do not. There is no “try”.” -- Yoda


Benefits of Our Approach

We understand the challenge

We have an approach that works

We can get the job done

We’ve price our services reasonably

We have a vested interest in helping you be successful

Approach


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“A true Lean transformation must begin with people.”

Carey and McConnell


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Plan for dealing with the impact that implementation of Lean practices has on the culture

A method to identify and prioritize value streams and business processes for improvement

Assistance with the identification of specific and measurable key performance indicators

Development of a leadership team representative of all company employees and functions,

empowered and capable of implementing the Lean Enterprise Initiative

Training in and use of a method for quickly evaluating and implementing changes to business

processes/RIE/Kaizen Events

A training plan and program for key staff members that allows for a gradual transition to

employee-led process improvement efforts.

A method to track and report hard dollar savings that result from Lean exercises and

improvements to business processes

Assist client’s Communication team to provide clear messaging about the Lean Initiative and its

results through key internal and external stakeholders

Although efficiencies can be achieved through attrition or reassignment of personnel, the Lean

Initiative will not be a tool or justification for layoffs or reductions in force.

The Lean Program should not be a “canned” version of initiatives completed for other

organizations and should be flexible and adaptable for the company’s mission

Although the consultant will have a direct and significant role in developing and leading the

program initially, the long term goal is to train and transition skills to company employees

What Does the Client Require?

Validate Contribution

Eliminate Waste not People

Communicate Clearly

Tailor Initiatives

Transfer Knowledge

Manage Change

Measure Results

Proceed with Speed

Develop Leaders

Focus Improvements

Train Effectively


WTA Lean Approach

Our Philosophy

The basics are the same, but the

details vary. - Recognize that each

client and each culture is different.

Be on the leading edge, not bleeding

edge. Focus on leveraging lessons

learned from other industries and

incorporate best practices from

previous projects.

Choose the tool that works best for

the situation. - Start with basic Lean

templates and approaches.

What worked somewhere else is a

good starting point, not necessarily

the end point. Modify standard

approaches to fit the specific client

environment and objectives

Tailor Initiatives


WTA Lean Approach

What we have learned…

“Brand” the initiative to create internal and

external interest and ownership.

Pay attention to other initiatives, and learn

from their experiences.

Don’t worry about getting it “perfect”, just

do what is right for your business and your

customer.

Coordinate with current projects so as to

optimize resources and ensure alignment.

Don’t take on too much at once.

Have fun!

Tailor Initiatives


Change Management Approach

Our approach embodies aspects of

change management throughout the

methodology:

• Coaching, mentoring

• Communications

• Governance

• Employee Empowerment

Our approach

• Tailor the change approach in Phase One

• Deploy in Phase Two

Results = Quality Solutions x

Acceptance

Manage Change

• Quick Wins

• Transparency

• Accountability

• Sustainability


Developing a Lean Leadership Team

Identify and involve leaders from all levels

of the organization

Transfer Knowledge through

Observation, Participation, Repetition

and Ownership

Develop a Recognition Program for

Leaders and Teams

Develop Leaders


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Communications Approach

Communicate early and often

Communicate to both internal and external stakeholders

Plan communication using stakeholder management tools

Communicate Clearly

Communication is the foundation of organizational buy-in.

Stakeholder Map and Alignment Plan

Stakeholder Groups Key Stakeholders in this

Group

Hot Buttons, Concerns, Interests How will we engage

them?

What do they expect from

us?

Communication

Opportunities

Communication

Timeline

Stakeholder Group 1 Executives Overall Information on governance

responsibilities, process changes,

roll-out, dry run & on-going metrics

Face to face

discussions

Same as Hot Buttons Governance Workshop One off event

Stakeholder Group 2 Mid Level Management Process changes directly affecting

employees & stakeholders;

interaction with new team; roll-out,

dry run & on-going metrics, escalated

issues

Calls and/or emails Contact List

New Processes

Governance Workshop One off event


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“Waste is a tax on the whole people.”

Albert Atwood


Projects Overview

Overview

Annually, Value Stream Analyses are

performed to identify and prioritize projects

for the upcoming year.

• Just Do Its

• Focus Events

• Short Term Projects

• Long Term Projects

Focus Events (i.e. RIE, Kaizen) are focused

process improvement events intended to be

completed in one week.

Proceed with Speed


s Value Stream Analysis

Prepare for

Event

Conduct

Event

Follow-up

Leadership/

Value Stream

Alignment

Projects

Prepare for

Event

Conduct

Event

Follow-up

Conduct

VSA

Workshop

Prepare for

VSA

Workshop

Follow-up

Conduct

VSA

Workshop

Prepare for

VSA

Workshop

Follow-up

Lean Improvement Approach Focus Improvements


Leadership Team

Lean Program Manager/PMO

Lean Team

WTA Lean Experts

Value Stream A Value Stream B

Value Stream

Exec

Sponsor

Lean Facilitator

Project Teams include:

• Process Owner

•Team Lead

•Team Members

• SMEs

• Customers

Project Team

Value Stream

Exec

Sponsor

Lean Facilitator

Project Team

Project Team

Project Team

Project Team

Project Team

Project Team

Project Team

Project Team

Project Team

Lean Initiative Structure Example Focus Improvements


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Leadership/Value Stream Alignment Process

2 Weeks Prior to Workshop

Review strategic plan and budget

Interview senior leaders

Finalize meeting logistics

3 Days

Introduction, approach

Process mgmt fundamentals

Define Key Business Processes

Metrics system

Strategic plan correlation

Select Key Business Process and

potential Value Streams

Select high level metrics (KPIs)

During Next 1-2 Years

Conduct Value Stream

Analyses for Key Business

Processes

Perform followup activities, (e.g.

input to strategic plan)

Conduct Alignment

Workshop

Followup

Prepare

Focus Improvements


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Mapping Levels

Organization-wide Key Business

Processes (KBPs) and Metrics

Value Streams

Processes/Metrics

Project

Processes/Metrics

Focus Improvements


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6-8 Weeks Prior to Workshop

Identify, validate and invite team

members

Finalize meeting logistics

Establish workshop guidelines

Review key Value Stream

documents:

• Mission, Strategy

• Org structure

• Procedures manuals

Gather and review data/metrics

2.5 Days

Introduction, approach, tools

training

Review key business processes/VS

map

Define scope of VSA focus

Identify and prioritize Events

Identify Event Participants

Develop High Level Event Maps

Draft Event Charters

2-4 Weeks After Workshop

Notify and debrief Event Team

Lead and Team members

Schedule Focus Events

Perform followup action items

Conduct Workshop

Followup

Prepare

Value Stream Analysis Process Focus Precisely Focus Improvements


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Conduct Event Followup

2-3 Weeks Prior to Event

Finetune Preliminary Charter

developed during VSA

Conduct working session(s) with

stakeholders to identify high-level

requirements and perspectives.

Gather & perform cursory analysis of

data to provide guidance to focus

event

Finalize logistics of Event

One Week1

Day 1 – Educate and Analyze

Day 2 – Brainstorm, Design

Improvements

Day 3 – Implement Changes

and Test/Simulate

Day 4 – Finalize Documentation,

Day 5 – Present Results

1 One Week if Focus Event

,additional weeks if a project

1-3 Months After Event

Complete documentation of

event and appropriate

“sharing”

Observe Implementation

Finish any open action items

Ensure Data Collection

Conduct periodic (30/60/90

day) reviews of metrics

Prepare

Focus Event Process Focus Improvements Focus Improvements


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“Several things must be done to move from Lean Six Sigma capacity to Lean Six Sigma

culture. Knowledge transfer may be the most important.”

Carey and McConnell - Knowledge Transfer is the Key to Lean Six Sigma Culture


Knowledge Transfer Philosophy

We focus on skills acquisition

Classroom Training is just one of many ways

to transfer knowledge

Hands On, Experiential Learning and

Coaching is preferable to Classroom Training

Classroom Training is best as a supplement

to hands on learning (not the other way

around!)

• Reserve classroom training for Project

Participants and Champions

• Train “just in time” – don’t overwhelm

participants with unnecessary training

• Create excitement around projects through

access to formal training

Transfer Knowledge


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Knowledge Transfer Process

• Attend the orientation and observe

the methodologies.

Observe

Ob

se

rve

Pa

rtic

ipa

te

Re

pe

at O

wn

Participate

• Participate in the Value Stream

Mapping and Focus Events led by

WTA Lean Experts

Repeat

• Repeat the learning by leading

portions of Focus Events in

conjunction with WTA Lean Expert

• Attend formal training

• Own the process, lead all Focus

Events with participation and/or

review of WTA Lean Expert

• Attend formal training

Own

Transfer Knowledge


Lean Transformation Framework

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Fo

cu

s

JumpStart Traction Expand Sustain

De

plo

yme

nt

Ad

op

tio

n

Go

vern

an

ce

S

tra

teg

y

Program Management

Alignment Implementation

18-24 months+

WTA Lean Transformation Framework - FLEX TM Transfer Knowledge

Responsibilities:

WillowTree Leads, with support

and participation from Denver

Water

• Assess and Align

• Identify and

Prioritize Value

Streams

• Define KPIs

• Conduct

Value Stream

Analyses for

25%

• Design

Infrastructure

• KPI/Metrics

• Governance

Structure

• Templates

• Design Approach

• Training

• Communication

• Change Mgmt

• Conduct Training

• Conduct Pilot

• Evaluate Results

• Followup

• Rollout Lean

Process to

25% of Scope

• Lead Focus

Events

• Training

Denver Water leads

• Complete

Training Rollout

• Employee

Engagement/

Recognition

• Rollout Lean

Process to

50% of Scope

• Rollout Lean

Process to

100% of Scope

• Expand Training

and

Communication

• Professional

Development

• Conduct VSAs for

50%

• Review/Calibrate

Strategic

Alignment

• Conduct VSAs

for 100%

• Review and

Renew

• Expand VS

Teams

• Track and

Report Results

• Update Pgm

• Expand VS

Teams

• Track and

Report Results

• Accountability

Denver Water leads, with support

and participation from WillowTree

• Form VS Teams

• Implement

Governance

Structure

• Track /Report

• Implement

Adoption

Approach

• Rollout Comm


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Recommended Training

Training Level Overview Duration Suggested Attendees Target Phase

Lean

Orientation

Overview of Lean Principles, Tools and

Methods

Introduction to Tools

Examples

4 Hours • Pilot Event participants,

sponsoring manager(s) of

the Pilot Event and Pilot

Event Project leaders

Phase One and Two

(Included in Pilot,

and all Focus

Events)

Executive

Orientation

Overview of Lean Concepts, Principles,

Methods

Developing, Managing and Nurturing a

Lean Culture

Bringing Benefits to Bottom Line

Hands-On Examples

Your Role as a Champion of Lean

Establish expectations as sponsors of

Lean projects

8 Hours Executive Team

Lean Executive Sponsor,

Lean Program Manager

Lean Project Manager

Value Stream Sponsors

Early Phase Two

Train Effectively


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Recommended Training

Training Level Overview Duration Suggested Attendees Target Phase

Employee

Orientation

Overview of Lean at Company

What it means to my job

How I can contribute

30 Minutes All employees and stakeholders Phase Two

Foundational

Training

Overview of Lean Principles and Methods

Understanding Lean Communication Strategy

and Change Management

Detailed Tools and Methods Training with

Examples and Case Studies

Identifying Opportunities, Prioritizing Projects,

and Achieving Results

Basic Project Management

8 hours Project Teams/Participants

Project Leaders

Sponsoring Managers

Phase Two

Mainstream

Training

Intermediate Tools Understanding

Introduction to Advanced/Six Sigma Tools that

complement Lean

Advanced Project and Change Management

Facilitation

16 Hours Company Project Leaders who

have successfully completed

Foundational Training and at

least one Lean Event and want

to become a Lean Facilitator

Organizational Leaders charged

with driving the Lean Enterprise

Initiative to the next level

Phase Two

Formal Training Focuses on the Participants of Lean Projects

Train Effectively


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“Routinely collecting, compiling, and communicating data on the performance of key

aspects of a process—including data not typically collected by environmental

agencies — is an important aspect of Lean and Six Sigma implementation. “

Environmental Protection Agency


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Metrics Approach

Metrics Description Target Number of KPIs Examples

Tier 1 Enterprise

Metrics/ KPIs

Begin in Phase One with KPIs at the

program/enterprise level. These KPIs support and

align with Strategic Plan and overall objectives of

the Lean Initiative.

3- 5 High Level KPIs, Tangible and

Intangible

Metric: Customer Satisfaction

Level: Enterprise

Target: Improve Customer

Satisfaction by 5% each year

Tier 2 Value

Stream

Metrics/VSIs

These KPIs are addressed in Phase Two, after

Value Streams are identified and chartered. These

KPIs link Enterprise KPIs to those associated with

each Value Stream. Each KPI supports or relates

to an Enterprise KPI.

3-5 Metrics (VSIs) per Value

Stream, linked to the Enterprise

KPIs


Level: Accounting Value Stream

Target: Reduce Customer Billing

Complaints by 15 % in 6 months

Tier 3 Project

Level Metrics

These KPIs are addressed as part of each project

and support and link to both the Value Stream VSIs

and the Enterprise KPIs.

1-3 Project Level Metrics per

Project/Event, linked to one or

more VSIs.


Level: Customer Billing Errors

Project

Target: Reduce Billing Errors

due to mis-keyed information by

20% within 30 days.

Measure Results

Specific Measureable Achievable Relevant Timeline


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Metric Definition and Data Collection

Project Name: Billing Errors

Project Leader: Susan Smith

Value Stream Name: Customer Service

Associated Tier 1 KPI: Improve Customer Satisfaction

Associated Tier 2 VSI: Reduce Customer Complaints

Metric Name: Reduce Billing Errors

Measurement and Data Collection Plan

Measurement Plan Metric Information

What do you want to Measure? Billing errors due to mis-keyed information

Operational Definition: How will measure be expressed Type 23 Billing Errors/All Billing Errors in One Calendar Month

Stratification: By variables By customer type

Target Improvement Date 30 days from start of project

Target Improvement % Reduce Error Type 23 by 50%

Data Collection Plan

Data Source: database or sample Customer Billing System ( CBS1)

Target number of units/samples 50% sample of Type 23 errors from each month

Time period of collection June 2011 - Dec 2011

Person Responsible John Rath

Measure Results


Lean Process Improvement Approach

Philosophy

Lean initiatives focus on an organization’s

work and operations, helping groups think

differently about the way they work, while

increasing capacity and adding value for

those they serve.

Lean focuses on eliminating administrative

and transactional waste.

Lean helps the organization design and

implement its processes by directly

focusing on achieving desired outcomes

Lean is the reason….

An Iowa business can now get a clean water

permit in 4.5 months instead of 28

In S. Carolina, lead time for processing storm

water applications dropped from 47 to 10 days

In Michigan, the application process time for

major permits is reduced from 422 to 98 days

In Iowa, a backlog of 600 clean air permits was

eliminated

At BAE Systems, ERP system upgrade time

reduced from historical highs of 24 to 10

months

Eliminate Waste

What is Lean Government? It is a mindset and a discipline to increase our

capacity to do more good.”

Ken Miller, Extreme Government Makeover


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Financial Validation

“CEOs want to know the return on investment of Lean projects, and CFOs want

to compare real financial results to “powerpoint dollars”. A rigorous

approach to calculating an improvement project’s impact is important to

every organization.”

R. Copercini – Calculating Financial Impact of Lean Six Sigma Projects


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Project Lifecycle

Lean

Event

Charter

Benefit

Assessment

Event

Approval

Track

and

Report

Benefits

Idea

Generation

and Triage

Event

Prioritization P & L

Reconciliation

= automated portfolio system elements for

financial validation process

Model

ROI

Event/Project work

(controls & tollgates)

Establish

Auditing

Parameters

Locate Tangible

Savings on

P&L

Statement

Accurate

Reporting

Event

Complete



Project Benefits Savings Categories Validate Contribution

Working Capital

Inve

nto

ry Re

du

ctio

n

Re

ce

ivab

le R

ed

uctio

n

Pa

yab

le In

cre

ase

Tangible

Re

ven

ue

Gro

wth

Cost Reduction

Cost of Services Sold Indirect COSS

Service Cost Other Cost RD&E Cost SG&A Cost

Labor

Other

Labor

Material

Other

Labor

Other

Material

Material

Selling, General, & Admin Cost

Asse

t Pro

du

ctivity

Material

Operating Income

Labor

Intangible

Other

Reduce NVA Cost Avoidance Employee Satisfaction Risk Mitigation Customer Satisfaction


Key Elements for Financial Validation

Financial Guidelines

• Financial Definitions for Project Benefits

• General Rules For Benefit Calculation

Project Benefit Governance Process

Specific Benefit Categories and Calculations

Tools & Templates

• Return on Investment Templates and Models

• Reference Guides

• Financial Statements Reconciliation Templates

• Auditing Documents

Financial Network Representatives

• Roles and Responsibilities Definition

Training

• Financial Process and Accountability


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