Lean Office & Business Processes Not Just for Manufacturing

Lean Office & Business Processes Not Just for Manufacturing

Manary Harcus Consulting Corp

Michelle Manary & Deb Harcus

• Organizational Effectiveness & Lean• What is Lean & how does it work?• Lean Office Tools & Terminology• Success Strategies• Role(s) of HR in Lean Initiatives• 8 Service Industry Wastes • Value Stream Mapping • Case Study• Debrief, Q&A

AgendaAgenda

Strategy Leadership

Infrastructure

People

Capabilities&

ResourcesRelationships

Organizational Effectiveness & LeanOrganizational Effectiveness & Lean

Source: Queens University

What is Lean?What is Lean?• Lean is a system that continually searches for and eliminates

waste throughout the total enterprise and value chain – Lean applies to office and administrative environments– In Service industries, there are 8 types of waste– Eliminating waste results in:

• Shorter lead times• Reduced costs• Less inventory • Higher throughput• Higher return on assets

• Six Sigma is a system focused on the elimination of defects.

The Language of Lean

Some Lean Office ToolsSome Lean Office Tools

• 5S & Visual Controls• Kaizen Event

• Value Stream Mapping

• Pull vs Push

Strategies for Success with LeanStrategies for Success with Lean• Base decisions on long-term,

system-wide goals• Create continuous flow to bring

problems to the surface• Level the workload (Heijunka)• Build a culture of stopping to fix

problems• Standardized work • Use visual controls• Use reliable, thoroughly tested

technology that serves your people and processes

• Grow leaders who thoroughly understand the work, and can teach it to others

• Respect your extended network by helping them improve

• Go and see for yourself (get in the gemba)

• Make decisions slowly, by consensus and implement rapidly

• Become a learning organization through relentless reflection (hansei) and continuous improvement (kaizen)

Source: The Toyota Way, Liker 2004

• Ensuring top down support & alignment• Review/revise HR strategy to support Business

strategy• Change Management• Organizational Effectiveness• Develop Managers who are Lean Facilitators• Redefine Jobs to support Value Stream Manager role• Lean Participant

Various Role(s) of HR in Lean InitiativesVarious Role(s) of HR in Lean Initiatives

8 Service Industry Wastes8 Service Industry Wastes

CorrectionsTransportationExtra processing Inventory

Approval processExcess motion Backlog in work queues Underutilized employees

Sort – What is not needed. Sort through, then sort out.

Set in Order – What must be kept, make it visible and self explanatory.

Shine – everything that remains.

Standardize – Set standards for the first 3S’s

Sustain – Requires discipline, stick to the rules and make them a habit

5S & Visual Controls5S & Visual Controls

5S is not free, but it does have accuracy and efficiency benefits

• Kaizen Means: “Continuous Improvement”• A “Kaizen Event” is normally 3 days long• Starts with a SIPOC map• Using Value Stream Mapping techniques: - Map the current state - Analyze & kaizen blitz possible improvements - Map future state• Begin to implement changes & measure results

A Successful Office Kaizen Blitz (pronounced Ki-zen)

A Successful Office Kaizen Blitz (pronounced Ki-zen)

SIPOC MapSIPOC Map

Suppliers Inputs Processes Outputs Customers– Defines the practical limits of your mapping activity

(scope)– Ensures you gather all the information you’ll need– Identifies the processes (which may have sub-

processes)– Captures the voice of the customer.

SIPOC Map ExampleSIPOC Map Example

Exec Committee

Dept Managers

Recruiters

Hiring Budgets

Job Descriptions

Recruitment & Selection

Payroll & Tax Setup

Candidates

Benefits Enrolment

Orientation Training

NewEmployee

Manager

Fits XYZ Culture

Oriented to Business

Setup for Payroll,

Benefits

Qualified

Co-workers

Customers

Suppliers Inputs Process Outputs Requirements Customers

New Employment Process – SIPOC Map

• VSM=The assessment and planning tool of lean practitioners

• 3 states exist: Current, Perceived, Future– The only way to ensure you capture the true

current state is to: walk the process

Current state map

Future state map

Implementation plan

Value Stream Mapping Value Stream Mapping

Drawing

Drawing

Plan & Implement

Risk of not mapping the current state is that you have no

baseline or justification for

making changes.

xcelIN

1 Day

% C/A=99%

L/T=0 days

Other

P/T=2min

Process Box Inventory/Inbox Delay TimeCustomer or

SupplierInformation Flow

Electronic Information Flow

Material (Paper) MovementWorkflowIterations or

ReworkWor

Worker

Electronic Inbox(queue)

Schedule

Data Box

Value Stream Mapping SymbolsValue Stream Mapping Symbols

Process #1

Value AddTime

Rework,Checking, RevisionsNon-ValueAdd Time

Queue/WaitTime

Process Time

Lead Time

Value Add, Process & Lead TimeValue Add, Process & Lead Time

1. Document customer information & need2. Identify main processes to deliver service

Start with customer and work backwards3. Collect data on main processes (attributes/metrics)4. Perform value stream walkthrough and fill in the data boxes, including

“work-in-process” Identify process boxes where flow stops and batch or queue occurs In the office, inventory is information in a queue (paper or electronic)

5. Establish how each process knows what to process next (information flow) Can be formal or informal; how is work prioritized?

6. Calculate lead time vs process time7. Calculate % accurate & complete8. Calculate value add

Map Current StateMap Current State

Example - Current State VSM MapExample - Current State VSM Map

Value Stream Metrics - Process Time (P/T): 75 minLead Time (L/T): 26-39 days

% Complete & Accurate (%C/A): 29%

Insurance Claim Processing

Timeline

• Process & available time• Set up time (eg: between computer systems)• Lead time/turnaround time (LT)• Typical batch size or frequency• % Complete and Accurate (%C&A)• Rework/revisions• Number of people involved• Downtime (eg: information systems)• Inventory – queues of information (eg: electronic, paper)• Demand

Team needs to decide which attributes/metrics will work best for tracking progress toward the targets.

Typical Data Attributes/MetricsTypical Data Attributes/Metrics

Value Stream ManagersValue Stream Managers

Each Value Stream needs a Value Stream Manager For product and/or service ownership beyond the

function Assign responsibility for future state mapping and

implementing lean value streams to line managers with the capability to make change happen across functional and departmental boundaries

Value Stream Managers should make their progress reports to the senior manager on site.

Now that the process is visible, what problems do you see?Challenge every step – ask the following:• What is really needed by the customer? (Takt)• How often do we need to check our performance? (Pitch)• Why are the current steps performed?• What can be done differently or not at all?• Is the order of the steps creating waste?• Can we eliminate certain steps or do others more

intelligently?• What assumptions underlie the current process?• Are existing tools and guides appropriate?• Go back to the 8 wastes to see if the step is a waste.

Which Steps Add Value and Which are Waste?

Which Steps Add Value and Which are Waste?

• What does the customer need and how are we doing in serving this need? – Takt time=Demand rate

• Which steps create/add value and which are waste?• How can we flow work with fewer interruptions/handoffs?• How can we control work between interruptions/handoffs? • How will we balance the work load and/or different activities?• How do we set pitch?

– Pitch is the tempo of the output– Ideal: Takt = Pitch

• What process improvements will be necessary?• Can we establish a pace or rhythm that improves processing?

Future State QuestionsFuture State Questions

• A document board in a highly visible area, and as close to the work area as possible

• Post the Current and Future state maps• Show Implementation Timelines• Key measures of progress and success

– Value stream performance indicators– Implementation progress & impact

• Other documents as required (as few as possible)

Project Tracking CenterProject Tracking Center

What gets measured gets monitored. What gets monitored, gets done.

• Identify map developer & spokesperson for your group• Read case & then map the current state process

– You have 2 colors of sticky notes – use one color for a process step, the other color for time spent waiting for something to happen

– Utilize the mapping symbols• Identify waste and problems • Gather and measure a variety of attributes, such as:

– PT – process time– LT – lead time– %VA - percent of process that adds value– %C/A – percent of process that is correct & accurate– %D/T – delay time– # of people involved– # of process steps required

• Brainstorm kaizen opportunities• Stop

Case Study #1Case Study #1

• What do you see?• What problems are pointed out?• Where were some of the “lean”

opportunities? • Discuss areas in your business that could

benefit from lean thinking

Case Study Debrief Case Study Debrief

• Identify all process improvements that could be done or will be necessary to implement the future state (Kaizen “bursts” or opportunities)

• Prioritize the list for quick hits and big hitters based on data or consensus

• Decide which attributes will be the best ones to use

• Map the desired future state & estimate expected results

• Consider Six Sigma for projects with unknown solutions and the root cause is unknown

Process ImprovementsProcess Improvements

Attribute Current State Performance

Future State Goal

Future State Expected Result

Actual Result

Measure The ImpactMeasure The Impact

Questions?

Not The EndNot The End

• Lean is a new beginning– Reinventing your business, increasing your

competitive position, a differentiator• It’s a continuous improvement journey

– Not an event or a project• Lean is a way of thinking that all employees

ultimately learn and continue themselves. It becomes part of the company culture and an organizational commitment