transferring lean principles to the front office
TRANSCRIPT
WCBF Lean Six Sigma Summit Chicago
Transferring Lean Principles to the Front Office
Mike Shuck, Manufacturing SpecialistChicago Manufacturing Center
Manufacturing Extension Partnership
Toyota Production System
Lean Manufacturing
Can just as easily be:
Toyota Transactional System
Lean Transactions
Transferring Lean Principles to the Front Office
Manufacturing versus Transactional
It really does not matter……..?
Does the House of Lean look any different?
Transferring Lean Principles to the Front Office
Lean Building BlocksManufacturing
ValueStreamMapping
Continuous Improvement
Quick Changeover
Standardized Work Batch Reduction Teams
Quality at Source
5S Workplace Organization
Visual Plant Layout
POUS
Cellular/FlowPull/Kanban TPM
Continuous Improvement
Lean Building BlocksAdmin/Office
ValueStreamMapping
Continuous Improvement
Voice of Customer
Standardized Work Problem Solving Teams
Quality at Source
5S Workplace Organization
Visual Office Layout
Leveling
Cellular/FlowPull/Kanban IT
Continuous Improvement
Everyone is in the Value Stream
Transferring Lean Principles to the Front Office
Accountin
gScheduling
Accounts
Payable
Accounts Receivable
Inside S
ales
Marketin
g
Human Resources Supply
ChainShipping
Receivin
g EngineeringSales
Manufacturin
g
CreditOrder Entry
Quality
Maintenance
Informatio
n
Technology
Everyone is in the Value Stream• Where do you start?
• Where would your customer want you to start?– Where are you difficult to do business with?– Friction points– Let the data lead you there
• Just start…………. SOMEWHERE
Transferring Lean Principles to the Front Office
Transferring Lean Principles to the Front Office
Some will say
“I agree, this is good stuff…..Start……”
Just start somewhere else …
because I have enough to do as it is!!!
During your lean journey, you’ll encounter
four types of people:
1. See it and get it
2. Don’t see it….eventually do
3. Don’t see it …good employees
4. Don’t see it and don’t want you to get it !
Transferring Lean Principles to the Front Office
Transferring Lean Principles to the Front Office
What happens if you do not start with the VSM?
Bosses favorite project
Feel good projects
Projects which can be completed quickly
Projects which cause the least friction
I’m relieved…..it might not include our department
A hit and miss approach
And the silo mentality can continues……………..
Sa
les
Ma
rke
tin
g
Ord
er
En
try
Sc
he
du
lin
g
Ma
nu
fac
turi
ng
Su
pp
ly C
ha
in
Sh
ipp
ing
-And by the way…..silos will always exists
-You can only lower the height
-Or decrease the wall thickness
Transferring Lean Principles to the Front Office
Lean = Eliminating WasteValue Added
Typically 95% of all lead time is non value-added
Non-Value Added
• Overproduction
• Waiting
• Transportation
• Non-Value Added Processing
• Excess Inventory
• Defects
• Excess Motion
• Underutilized People
Is VA and NVA any different in the office?
Overproduction WasteDefinition & Causes
Manufacturing• Misuse of automation• Long setup time• Unleveled scheduling• Over-engineered
Admin/Office• Wrong priority• Ineffective
communication• Unbalanced workload• Not focusing on company
objective
Making more, earlier and/or faster than required by the next step in the process
Waiting WasteDefinition & Causes
Manufacturing• Unbalanced workload• Unplanned maintenance• Long setup time• Upstream quality
problems• Misuse of automation
Admin/Office• Unbalanced workload• Redundant approval• Unreliable software or
hardware• Unavailable documents
• Incomplete and/or incorrect information
Idle time created when waiting for …
Transportation WasteDefinition & Causes
Manufacturing• Poor plant layout• Large batch sizes• Large storage areas• Long lead times
Admin/Office• Poor location of offices• Multiple file storage areas
& systems• Multiple approvals• Lack of identification
Transporting parts, materials, documents, and information around the facility.
Non-Value-Added Processing WasteDefinition & Causes
Manufacturing• Product changes without
process changes• True customer
requirements not clearly defined
• Redundant approvals• Rework
Admin/Office• Lack of communication• Redundant approval• Too many information
systems• Repetition of same
information in different documents
Effort that adds no value to the product or service from the customer’s viewpoint.
Excess Inventory WasteDefinition & Causes
Manufacturing• Inefficiencies and
unexpected problems• Unleveled scheduling• Poor forecast• Poorly designed reward
system• Unreliable suppliers
Admin/Office• Poor scheduling• Unbalanced workload• Buying too many office
supplies• Lack of system to manage
inventory• Batch processes
Any supply in excess of one piece flow.
Defects WasteDefinition & Causes
Manufacturing• Weak process controls• Poor quality• Deficient planned
maintenance• Poor product design
Admin/Office• Under-trained employees• High employee turnover• Doing process in a rush• Confusing procedures
Inspection and correction of parts, materials, or information.
Excess Motion WasteDefinition & Causes
Manufacturing• Poor people/machine
effectiveness• Inconsistent work methods• Poor facility or cell layout• Poor workplace
organization
Admin/Office• Poor workplace
organization• Lack of training• Nonstandard work
methods• Poor office layout
Any unnecessary work movements of people or equipment.
Underutilized People WasteDefinition & Causes
Manufacturing• Low or no investment in
training• Low pay, high turnover• Poor hiring practices• Not asking “What do you
think?”• Low expectations• Penalizing experimentation
Admin/Office• Low or no investment in
training• Low pay, high turnover• Poor hiring practices• Not asking “What do you
think?”• Low expectations• Penalizing experimentation
The waste of not using people’s creative abilities.
• Start closest to the customer.• Are you invoicing correctly?• Are you price lists current?• Do you use Voice of the Customer (VOC)?• How long to replace a incorrect shipment?• How long to correct the credit adjustment?• How long to answer the phone?• Are your lead times too long?• How long to get a quote?• How many customers are you gaining?• How many customers are you losing?
Transferring Lean Principles to the Front Office
So where do you focus in the office?
• How long does it take to develop a new product?• Are you offering the best freight options?• Are you expediting when you don’t need to?• Who controls expediting?• How much friction is there in you AR/AP?• What are you spending your freight on?• Are there visuals indicators as to how we are doing?• Can customers track their order online?• Can they order, get samples online?• Is there repetition of same information in different documents?
Transferring Lean Principles to the Front Office
Information Technology• How reliable are your systems?• Are all your reports used?• Do others ask for specific reports or do you give the
them data to sort themselves?• Are all your forms accessible via an intranet?
Transferring Lean Principles to the Front Office
Other office areas to focus
Finance• How long does it take to process Capital Expenditures?• How long is the budgeting process?• How many days does it take you to close month end?
Transferring Lean Principles to the Front Office
6 minutes video of Western Union Current State
Transferring Lean Principles to the Front Office
Discuss video
Transferring Lean Principles to the Front Office
2 minutes video of Future State
Transferring Lean Principles to the Front Office
Western Union Changes
• Cross training of office personnel
• Contract was signed later – after scheduling training during delivering training & equipment
• Excessive volume and phone call backlog led to the salesperson, customer and order entry person gathering the information real time – this required 15 continuousminutes but the tradeoff was no call backs/phone tag
• Took 5-6 months to implement and done with week long kaizen events
Western Union Results Before After %(+/-)Number of Handoffs
73 18 75 %
Number of Steps 229 69 70 %
Number of Delays
80 17 79 %
Cycle Time 49 hrs 17 hrs 65 %
Total Lead Time 90 days 19 days 79 %
Attrition 15 % 1 % 99 %
Revenue Increase(12 month)
-$3.1
Million
122,500
More days
of potential revenue
EBIT -$1.7
million
• Explain the following, including your rationale:
• Takt?
• Where will you flow, where do you need to pull?
• What is the pacemaker process?
• Will you level the workload?
• Are supporting improvements necessary?
• Resulting lead time improvement?
Team Tips: Presenting Your Future State Map
Don’t Wait!
You need a plan!
1. Tie it to business objectives.
2. Break your Future state into “loops.”
3. Make a Value Stream Plan: What to do by when.
4. Relate the Future State Map to your layout.
5. Conduct Value Stream Reviews by walking the flow.
Implementation
A Plan to Get There
Use the Value Stream Map to interrupt the data
Without data, you only have opinions and everyone has one!
Don’t let perfect get in the way of better!
Start somewhere……………
Transferring Lean Principles to the Front Office
Current State VSM Example
Transferring Lean Principles to the Front Office
Prioritize your to do list / projects / Kaizens
Easy to do
High impact
1
Easy to do
Low impact
2
Hard to do
Low impact
4
Hard to do
High impact
3
Thank You
Transferring Lean Principles to the Front Office