Lean: What is it and how to use it?An introduction to applying Lean to improve service quality and cost

William FellApril 4th, 2012 Exceptional people delivering exceptional results

The challenges of ‘traditional’ change in the workplace

Limited delivery following after months of work and the production of long reports

Lack of engagement generating resistance to change Flavour of the month feeling so your people ignore it The organisation staggers from one initiative to the next, never

delivering the planned results Focus on the next big new idea – lots of up front cost and no real

benefit – built on existing process rubble Customer service damaged In summary lots of cost, time and effort with little real

improvement.

Some of the challenges for universities today

Increased student expectations Harsher competitive environment Scarcer resources New fees regime (England) and uncertain funding futures Newly emergent competitors – domestic and international Identifying and securing new income streams

People and change

For an organisation to change successfully the people within it have to change and make the transition associated with change

It has been estimated that 80% of change projects that fail do so because ‘leaders’ fail to manage the people issues associated with change

To minimise the risks of failure, leaders need to understand how people react to change but more importantly if change is to be successful people need to be given the opportunity to be involved.

Lean – what is it?

A methodology for achieving excellence in customer service, by eliminating waste and optimising the flow of customer value through the workplace

It also gives employees on the front line the motivation, tools and freedom to make major improvements to their daily work

A people-based approach to implementing Lean can help organisations achieve a radical improvement in productivity very quickly and build a sustainable incremental growth thereafter.

Lean – what is it?

Effective improvement and change management Engages all of the organisations people Focuses on the customer and what they value Based on understanding the operational data and the process

demand Defines new processes Designs processes to flow across functional / organisational

interfaces Eliminates non value adding steps Generates short term and long term improvements Based around focused and intensive interventions Delivering continuous improvement.

Lean – what it is not!

Short-term cost reduction programme Process to support headcount reduction Only for front line staff Based on using qualitative metrics to define impact Deployed without clearly defined ownerships, roles and

responsibilities A diet A computer thing A silver bullet Just about the process.

A brief history of Lean

Lean Service & Lean Systems

Thinking

Lean Frontiers:Green lean

Lean accountingLean IT

Lean Frontiers:Green Lean

Lean accountingLean IT

Six Sigma(GE & Motorola)

(Lean) Six Sigma

Lean Manufacturing

Vanguard “Check Model”

Toyota Production System

(Ohno, Shingo)

Deming Management

Method / Joseph Juran

Scientific Management

Walter Shewhart(Bell Telephone)

TQM (1980s/90s)

Ford & GMMass Production

Scientific Management

Taylorism

Sakichi Toyoda Father of Japan’s

Industrial Revolution

1890s – early 1900s

early 1900s – 1950s

1950s – 1980

1980s – 2000

2000 – present

Deming’s 14 principles

1. Create constancy of purpose towards improvement

2. Adopt the new philosophy

3. Cease dependence on inspection

4. Move towards a single supplier for any one item

5. Improve constantly and forever

6. Institute training on the job

7. Institute leadership

8. Drive out fear

9. Break down barriers between departments

10.Eliminate slogans

11. Eliminate management by objectives

12.Remove barriers to pride of workmanship

13. Institute education and self-improvement

14.The transformation is everyone’s job

Examples of how Lean thinking differs from the norm

‘Command & Control’ **

Who is in charge? What’s my job description? Let’s get economies of scale Let’s standardise the process What does the contract say? What’s the target? Whose fault is this error? We need a quick win ‘Good enough’.

** Adapted from John Seddon (2003) Freedom from Command and Control

‘Lean Thinking’ Who is the customer and how do I

add value? How much demand is there? Let’s get economies of flow Let’s standardise the quality of the

outcome Let’s cooperate How capable are we at delivering

what the customer wants? Let’s learn from mistakes Let’s adapt over time Let’s aim for perfection.

Purpose – Measures - Method

Seddon J. (2008) ‘Systems Thinking in the Public Sector’

The core of Lean

Define who are the customers – recipients, payers and / or other stakeholders (e.g. owners of interfacing processes)

Define desired outputs and value in customer terms Define current process (value stream) - as it really is, not as it is

supposed to be Identify & eliminate waste - all steps should directly contribute to

satisfying the need of the customer Make the process flow so the customer can ‘pull’ (i.e. demand

from the customer).

Lean and waste

Remember though…..Waste is a sensitive issue

It is critical to eliminate ‘waste’ It is also critical to recognise that the non value adding activities

may have been a core part of someone’s job for many years It is the activities that are non value adding.....not the person.

Some Lean tools………

Here’s a list of some of the tools developed for Lean improvements: 7 / 8 wastes A3 thinking VA / NVA identification Kaizen (blitz, blast) / Rapid

Improvement Event (RIE) Control charts PDSA / PDCA Poka Yoke (mistake proofing) Root Cause Analysis / 5 Whys SPC (Statistical Process Control) 5S

Theory of constraints Value / failure demand Value stream map / mapping Voice of the customer SIPOC Whole systems check.

Other complementary tools Cooperative inquiry Appreciative inquiry Clean language Symbolic modelling.

Lean – how to use it…….a 5-step method

Senior stakeholders Service Managers Sponsor owned; project team designed and led

Whole system information

Customer - the beneficiary of the service / processes  Roles (participants / staff) - the people / roles who perform the tasks

/ activities in the service / processes (includes capacity available) Purpose – what is the main purpose of the department / service for

the team (and also for individuals) Work - what are the core activities carried out in the delivery of the

service (functions / processes) (includes demand on the system) Stakeholders – where / how the service fits into the larger

perspective and which other organisations are involved (includes suppliers)

Environment - IT systems / software and paper / electronic forms used to deliver the service / processes

Specifications / policies – what exists to define the service delivered, policies that apply and service level agreement with clients/ suppliers.     

Finding the quick wins

Should have minimal impact on separate business areas Be quick and inexpensive to implement Have strong support through the team / organisation Require clear and simple changes by the participants Be low risk Quick to implement – ideally less than one month Measurable – outcome saves time Solves frustrating issue that has hung around for a long time Get as close to the root cause as possible Must not cause any knock-on effects.

Finding the focus areas

Bigger work streams to get something done / changed Mini-project or big project Utilises ‘strengths and opportunities’ to overcome any

‘weaknesses and threats’ Gets to the root cause Usually found in P2T2 areas (always related to ‘purpose’):

Policies / specifications Process improvement / streamlining Training Technology.

Lean and culture

Lean challenges command and control management behaviours It encourages all staff to develop improvements It encourages the organisation to trial improvements in a

controlled environment It is action orientated not report orientated.

Lean and leadership

Lean challenges many of the traditional leadership styles in organisations

It requires the leadership team to: Set the direction Define the parameters for the work Commit the resource Support the delivery of the outputs

Within those limits the leadership teams hands responsibility to the front line team to Redesign the process Identify waste Develop actions that will reduce waste Design the team structures Deliver continuous improvement.

Lean and your customers

Lean focuses on what the customer values It deals with the processes that produce outputs not areas of

functional responsibility It seeks to eliminate non value adding activities from the

processes It uses measures to drive the desired organisational behaviours It understands customer demands It uses data to develop improvement actions.

Lean and your people

Lean change is a way of operating not a one off change programme

Your people are engaged directly in delivering the results The required outputs are based on what your customer values The parameters and direction are defined by the leadership team The people who do the work design the changes Lean creates a structure which encourages ongoing improvement.

Lean….the journey

1Efficiencyactivities

2ProcessAware

3ServiceImprovement

4ServiceTransformation

5Culture Change

6Lean Systems Aware

Phase of maturity

Lev

el o

f L

ean

S

yste

ms

Mat

uri

ty

♦

♦

♦

♦

♦

♦

Broad &shallowprocessreviews

Set-upBPI team

♦

Make efficiency& capacity savings

Choose toolsand beginreviews acrossthe Organisation

♦

BeginLeantraining

Check benefits are being realised?

Start Lean reviewsacross theCouncil

Include behaviour shift capability in approach

♦Confirm people-basedapproach

♦ ♦

Lean culture embedded

Continuousimprovementcycle in place

Lean and your university……size of the prize!

Many organisations are good at the things that add value Many organisations are not good at reducing the non value

adding steps in processes Lean defines this non value adding activity as waste Lean releases the resources that are taken up with that wasteful

activity The resource prize in eliminating the waste is significant – 40% to

70% reductions in resource time are possible and achieving.

References

Aligning processes to competitive needs using lean practices - Professor David Stockton, De Montford University, Leicester.

Analysis of Lean Implementation in UK Business Schools and Universities - Zoe Radnor & Giovanni Bucci, AtoZ Business Consultancy.

Website and associated collaterals – University of St. Andrews. Freedom from Command and Control – John Seddon Systems Thinking in the Public Sector – John Seddon Out of the Crisis – W. Edwards Deming The machine that changed the world – Womack & Jones (and Roos) Lean Management Masterclass – Myles, Scottish Executive.

Where to go for more information?

Core Principles Freedom from Command and Control (John Seddon) The Toyota Way (Jeffry Liker) Out of the Crisis (W.E. Deming)

Tools & process The Lean Service Toolbox (John Bicheno)

Historical context The Machine that Changed the World (Womack and

Jones)

Operations management and strategic lean

Understanding Variation (Donald Wheeler)

Specialist: Critical Chain (Eliyahu Goldratt) Lean IT ( Steven Bell & Michael Orzen) Practical Lean Accounting (Brian Maskell & Bruce

Baggaley) Open Space Technology (Harrison Owen) Clean Language (Wendy Sullivan & Judy Rees)

iTunes (free podcasts):

The Systems Thinking Review Lean Summit 2010 Profit through process (Six Sigma IQ) and many others…

Useful (free) clips Why Targets are Dangerous

http://www.youtube.com/watch?v=pfcVwIcRxxM Deming Library excerpt

http://www.youtube.com/watch?v=GHvnIm9UEoQ Trabant Quality Control

http://www.youtube.com/watch?v=mIAYxWCXF8A

Your speaker today William Fell william.fell@capita.co.uk 07557 004 307

QUESTIONS?