An Introduction to Lean Systems Thinking … a better way to make the work work

© Vanguard Consulting Ltd© Vanguard Consulting Ltd

An Introduction toLean Systems Thinking

… a better way to make the work work

"We cannot solve the problems we have created with the

thinking that created them."

Einstein


Two main design and management thinking approaches …

© Vanguard Consulting Ltd

Mass Production / Command & Control


Hundreds Of

Suppliers

Stamping

Foundry

Body & Frame

Painting

Rework

Power Train

W A R E H O U S E

Final Assembly

(& Rework) Dealers

Customers

Orders

Planning

Production Programme &

Forecast

Material flow Information flow

MA

NA

GE

ME

NT

FA

CT

OR

Y


Arise Command & Control!

Perspective

Design

Decision making

Measurement

Management ethos

Top down, hierarchy

Functional

Separated from work

Output, targets, standards related to

budget & plan

Manage people, hit budget and plan

NOT DESIGNED

AGAINST DEMANDBUILDS IN WASTE

AND INHIBITS FLOW


Company

Worker Worker Worker Worker

Customer

Material flow Information flow

Variety in the context of continuous flow

MANAGEMENT FACTORY

An alternative solution…


Summary of TPS Features

• Pull

• Flow

• Waste

• Measures

• Decision making

• Management role


The Toyota Production System

“The number of man hours it takes to build a Lexus is less than the man hours used in re-

working a top-of-the-line German luxury car at the end of the production line, after it has been

made."

The Machine that Changed the WorldWomack, Roos & Jones 1990


Vanguard - translation for Service

Service differs from manufacturing!

The customer is involved in ‘production’,

• Their Demand triggers our work…

• Variety of customers and demand is huge!

i


Systems Thinking Principles

Perspective

Design

Decision making

Measurement

Management ethic

Outside - in

Demand, value, flow

Integrated into the work

Related to purpose, and show

capability

Act on the system


Thinking

System

PerformanceimproveService

EfficiencyRevenueMorale

Change this

Tools here


The rise of Tools

• Six sigma– Centred on a powerful problem solving and

process optimisation methodology, 6 Sigma is credited with saving billions of dollars for companies over the past ten years.

• Define • Measures • Analyse • Improve • Control


… and plenty more!• 5 s• 4 actuals• 7 wastes• Tact time• Value Stream Mapping • Brainstorming• Cause and Effect• Control Charts• Decision analysis• Failure Modes Effects Analysis (FMEA) • Force field Analysis• Pokeyoke (Failure Proofing) • SIPOC (Suppliers, Inputs, Process, Outputs and Customers)

• Spaghetti Chart • Treatability Matrix


Thinking

System

PerformanceimproveService

EfficiencyRevenueMorale

Do they change

this?


CUSTOMERS DEMANDS PROCESSES OUTCOMES

These Vary!

Unhelpful? Costly?

“WHAT MATTERS?”

Focus outside in, design to absorb variety

i


£

Nominal Value


Costs of departure from the nominal value

BusinessmanFishermanMum & Kids

Customer sets nominal value and thus the response of the service.

Quick & HotKids 1st

then me

Coffee I/V

Laptop

DnD

i


The place to start is Check


Check

Check

PlanPlan

DoDo

i


What is the purpose (in customer terms)?1

Demand : T&F, V&FWhat matters?

2

Capability of response3

Understanding your organisation as a System The Vanguard model for ‘check’


Understanding capability data

• Much of what we currently report on are percentages or averages in relation to targets (static data points)

• Few of these targets relate to the real experience of the customer

• Because of the way it is reported it is hard to see the effects of changes and decisions that we may be taking


Understanding capability data

• Statistical process control charts (SPC) or Capability Charts are a powerful way of looking at our data and understanding the performance of our system

• They capture statistically the capability or predictability of our system in delivering service for customer over time

• Normally used to understand frequency of an occurrence or elapsed time (end-to-end)


No. of Days

UCL

mean

LCL

x xx

x

x

x

x

x

x

x

x

x

x

xx

x

Cases

How they work

Every system has inherent

variation

We tend to only pay attention to the average

100

50

Statistically we can measure the variation or predictability – what it

feels like for our customersWhat’s important is knowing the extent of this variation

and why – the causes


Understanding your organisation as a System

What is the purpose (in customer terms)?1

Flow : Value work + Waste4

Demand : T&F, V&FWhat matters?

2

Thinking6

System Conditions5

Capability of response3

The Vanguard model for ‘check’


Change based on knowledge…

Thinking

System analysisaction

change

…act on the

Performanceimprove


Case Study 1: Housing benefits


What you learn from Check

What do customers want?

“Can I make a claim?”“My circumstances have changed”


What matters to customers?

• “I get an answer quickly so that I know whether or not I’m going to get help”

• “Deliver payments quickly so that I don’t get hassle from my landlord or the CTax department”

• “Make sure my benefits keeps track with changes in my situation…”

• “You help me through the process”• “I can understand the letters & forms”• “I don’t mind waiting a bit if I know it is going to be

sorted”


Purpose

Pay the right money to the right people as quickly as possible


Capability(how well are we meeting the purpose in customer terms?)

• We don’t know!– Because we don’t measure it!

• But … we do measure:– BVPIs & position relative to ‘similar’ authorities– Waiting time in reception– AvHT, wrap, etc. in the Call Centre– Number of cases per day in the back office


Ucl = 152

mean = 52

So what do customers experience?


Learning to see HB as a System

Inspect

SortScanIndex

Decide

Allocate

Notify

Hand out formsTake in documents

Pay

22%V 78%F

44%V 56%F

34%V 66%F

99% claims ‘dirty’No case

ownershipCTax

fragmentation

1-10 cycles to clean (ave.4) 95% cases over-specified 20% docs. duplicated

60% errorsRework

Multiple Sorts & ChecksCases fragmentedScanning/Indexing errors

64% passed backManage queues

Letters unclear87%

0-152 days to pay3% visit once

Handoff

HO

HO

HOHOHO

“I want to claim”

Workers’ activity ‘managed’


Is there opportunity to improve?

How would you realise it?

i


Thinking

System

Performance

What is the

… to result in

That has caused the

i



Inspect

SortScanIndex

Decide

Allocate

Notify


Pay

22%V 78%F

44%V 56%F

34%V 66%F


ownershipCTax

fragmentation


60% errorsRework



Letters unclear


Handoff

HO

HO

HOHOHO




Case Study 2: The IT Helpdesk


What’s itsPURPOSE?

If there is an issue, sort it:

One-stopor manage my expectations


The IT Helpdesk … What a user experiences?

What’s going on?

FIX

CLOSE

LOG QSM@

16% 33%

A Story of IT Support

TO TEAM A or S CUST

FIX

CLOSE

DDWW1:11:1

DDWW1:11:1

CUST

FIX

CLOSE 51%

MORE WORK

WAIT

Work done

R & R

Diagnosis

Fixing

Ordering …

Reasons for wait:

Reallocation

suppliers

engineers

user1.5 min

1 Hr58 Hrs 83 Hrs

Calls not being fully fixed first time

Ongoing problem

Not set up properly

Calls closed

Bounced between people / teams

Predictably up to 5 people3 teams

Vanguard

www.lean-service.com

What underpins this design & performance?

FIX

CLOSE

LOG QSM@

TO TEAM A or S CUST

FIX

CLOSE

DDWW1:11:1

DDWW1:11:1

CUST

FIX

CLOSE

MORE WORK

WAIT

Functional Design

HelpDesk

Core Techs.

Remote Techs.Operations

Development

HandoffBatchCheck

Rework

= DELAY

83 Hrs

Vanguard



FIX

CLOSE

LOG QSM@

TO TEAM A or S CUST

FIX

CLOSE

DDWW1:11:1

DDWW1:11:1

CUST

FIX

CLOSE

MORE WORK

WAIT

Functional Design KPI’s

Raise Job Stop Clock Close JobReopen

Focus on Close NOT Fix

= MORE WORKPrioritise jobs

= DELAY

Logging data

83 Hrs

Vanguard



FIX

CLOSE

LOG QSM@

TO TEAM A or S CUST

FIX

CLOSE

DDWW1:11:1

DDWW1:11:1

CUST

FIX

CLOSE

MORE WORK

WAIT

Functional Design KPI’s Procedures & Authorisation

Control over IT people and costs

= DELAY= STAFF FRUSTRATION

We say “No!”

= USER FRUSTRATION

Vanguard



FIX

CLOSE

LOG QSM@

TO TEAM A or S CUST

FIX

CLOSE

DDWW1:11:1

DDWW1:11:1

CUST

FIX

CLOSE

MORE WORK

WAIT

Functional Design KPI’s Procedures & Authorisation

BUDGET CONTRACT

Focus on the numbers“Lower Cost” staff for “Simple” jobsJuggle resources between support

and developmentSay “It’s chargeable!”

Authorisation to “control” spend

Stick to the letter Ensure we hit the numbers (and don’t

get fined)Juggle resources between support

and development

Vanguard



Performance

• Hard to get through• Poor first time resolution• Long E2E time• High failure demand• Rising complaints• Poor retention• Rising costs• High staff turnover

• Demands equal units of work• Functionalised design• Managers make decisions• Focus on productivity, output and prizes• Workers follow procedures• Hand-off, batch & Q, checking, reworking

• Focus on revenue• Meet the budget• Stick to the contract• Manage the people• Improve through Projects

System

Thinking


Principles for ‘Plan’ (Re-design)

Clarity of purpose1

Clarity of the permanent measures2

What are the ‘core’ roles?Design against demand

4

C

U

S

T

O

M

E

R

S

What are the value steps?3

What are the management roles?

Add value

5

Where do we need to act? Remove System Conditions

6



Inspect

SortScanIndex

Decide

Allocate

Notify


Pay

22%V 78%F

44%V 56%F

34%V 66%F


ownershipCTax

fragmentation


60% errorsRework



Letters unclear


Handoff

HO

HO

HOHOHO




Change thinking, improve performance

Pay the right people the right money fastPurpose

Measures

Method

mean = 142

Experiment: find & act on causes of variation


Purpose

Measures

Method

Pay the right people the right money fast

mean = 142

mean = 12

Change thinking, improve performance


The Systems Solution: design against demand

Expertise

Value Work

Demand “I want to claim”

•Obtain clean information•Make a decision•Notify the claimant•Pay if entitled

•Put the claims expertise at the front end•Enable assessors to pull support on

demand•Build Ctax expertise into the flow•And measure against purpose


Repairs as a System

CallCentre

Worksorder Supervisor

Tradesman

Materials

Access

Repair

“Something’s broken…”

Service Level, AvHTDiagnosis & SoR

Target Times, Budget

Diagnosis,Bonus, Fix

Cancel WO’s

favouritism

Delay

No. JobsType of job

40% fail

95% WO’s Reworked

Parts/materialPriority

Activity, Time, CostProp. o/heads

Re-allocateArgue

“What’s going on!”“It’s not fixed!” 65%

Bonus

Distrust


What would you do?

• Think about…– “What Matters?” to the tenants– What is the VALUE work?– How could we just do the value work?– What would we need to do to help those to do

their jobs?– What are the implications on roles?– What should we measure?


Should we worry about people of process?


The importance of measures


Causes of Variation?

UCL

LCL

x xx

x

x

x

x

x

x

x

x

x

x

xx

x


Setting a target that exceeds capability

UCL

LCL

x xx

x

x

x

x

x

x

x

x

x

x

xx

x

Target


Setting any target ?

UCL

LCL

x xx

x

x

x

x

x

x

x

x

x

x

xx

x Target


What’s important?

UCL

LCL

x xx

x

x

x

x

x

x

x

x

x

x

xx

x

What’s important is knowing the extent of this variation

and why – the causes


Capability vs TargetsTargets Capability Measures

Arbitrary – “plucked out of the air” Derived from the work

Increase disorder in systems Lead people to work in ways that increase order and control

Focus people on the wrong things – survival not improvement

Focus ingenuity on how the work works

No value in understanding and improving performance

Understanding causes of variation provides a focus for improvement

De-motivating – no understanding of capability

Motivate – put control and understanding in the right place


What makes a good measure?

• Measures must be derived from the work – relate to purpose

• Measures must help us understand and improve performance

• Measures must demonstrate capability and variation over time

• Measures must be in the hands of the people doing the work, to control and improve the work

• Measures must be used by staff and managers to take action on the systemi


Summary – the key issues

1. Not paying attention to demand

2. Damaging the ability to absorb variety

3. Managing people not the process

4. Using the wrong measures


Reading ListVanguard Stuff : www.lean-service.com • Freedom from Command & Control, John Seddon• I Want you to Cheat, John SeddonRecommended• The New Economics, W. Edwards Deming• The Toyota Production System, Taiichi Ohno• The Machine that Changed the World, Womack Jones & Roos• Lean Thinking, Womack & Jones• Understanding Variation, Donald Wheeler• Punished by Rewards, Alfie KohnInteresting but Dangerous - you work out why…• The Principles of Scientific Management, Frederick Winslow Taylor

Documents

An Introduction to Lean Systems Thinking … a better way to make the work work