Lean Is About Time—Particularly in Customer-Facing Services Presenter: Richard J. Schonberger 177...
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Lean Is About Time—Particularly in Customer-Facing Services Presenter: Richard J. Schonberger 177 107th Ave., N.E., #2101 Bellevue, WA 98004 USA [email protected]
Lean Is About TimeParticularly in Customer-Facing Services
Presenter: Richard J. Schonberger 177 107th Ave., N.E., #2101
Bellevue, WA 98004 USA [email protected] IIE Annual
Conference Applied Solutions Sessions Nashville June 2, 2015
Richard J. Schonberger
Slide 2
This presentation draws from Richard Schonberger presentation
at: POMS 26 th Annual Conference Washington, DC May 8-11, 2015
Sub-Title: Fixing Leans Bungled Transition from Manufacturing
Richard J. Schonberger
Slide 3
This presentation includes research and topical materials from
Richard Schonberger book : Best Practices in Lean Six Sigma Process
Improvement: A Deeper Look... with Telling Evidence from the
Leanness Studies (New York: John Wiley & Sons, 2008) Richard J.
Schonberger
Slide 4
Era of Process Improvement Just-in-time (JIT) production: Circa
1960 in Japan; 1981 in U.S., linked with quality, as JIT/TQC JIT
renamed lean 1990: in book, Machine That Changed World, but not
joined with TQM Six Sigma: Motorola, 1986 (successor to TQM?) Lean
+ Six Sigma merger, 2000s All the above = Continuous process
improvement In what sense? Richard J. Schonberger TQC Total quality
control TQM Total quality management
Slide 5
Ever quicker, more flexible, higher-quality, lower-cost
responseall along the chain of customers Service examples including
visual- management features Richard J. Schonberger
Slide 6
Ever quicker at Seafirst (later B of A) Bank Lean objective:
Queue/queue-time reduction Photo goes here
Slide 7
Queue-time Reduction Leans Dominant Quest and Result 5 minutes,
$5 at Seafirst bank (1995)*: Highly flexible, on-call staff
Electronic record of every $5 payment High payments treated as
measure of poor quality to customers *ANZ (Australia and New
Zealand) Bank was using the same system in mid 1990s Richard J.
Schonberger
Slide 8
More flexible Photo goes here
Slide 9
Ever quicker and more flexible At Atlantic Envelope Co.,
Atlanta Two cross- trained, clerks co-located behind parti- tion
cut order process time to 1 day; also plot/manage own results
Prior: 1 week thru 4 depts.
Slide 10
Issue: Radnor, et al.*, say... Healthcare is... capacity led...
lean, therefore, is unlikely to free up resources or influence
demands for care. *Lean in Healthcare: The Unfilled Promise (Four
case studies in UK National Health Service); Social Science and
Medicine, 74:3 (February 2012): 364-371 Richard J. Schonberger Oh,
yeah?
Slide 11
Richard J. Schonberger 8 AM Surgery Dr. Frederick Dr. Singh Dr.
Vickery Nurse Olsen... Instruments... Who was late chart Nurse
Debby Costly Resources Freed Up, with Enhanced Patient Care... in
Debbys Dugout Northwest Hospital, Seattle 1992
Slide 12
Cells: Co-location with Cross-Training Leans Most Effective
Methodology One-Stop Vehicle Licensing, Lincoln, NE
(1984)Overcoming Legalities: Citizens processed at one long
counter, subdivided into 3 legal entities, each with cross-trained
employees Richard J. Schonberger
Slide 13
Vehicle licensing counter shared by employees of the county
assessor, clerk, and treasurer Photo goes here
Slide 14
Vehicle Licensing Lancaster County, Lincoln, NE Formerly: 3
separate offices, different floors; citizens would queue up, find
they were in wrong line Single counter shared by 3 county agencies
Counter Clerk Treasurer Assessor
Slide 15
More Services Examples HUD/FHA Seattle: 158-day loan processing
cycle down to 29 days (via cross-training, express lane for
no-issue loans, etc.); led to application of same methods
country-wide Virginia Mason (lean-famous internationally): Via
co-location & 5S, nurses cut search times (in steps walked per
day) from 10,000 to 1,200 Richard J. Schonberger
Slide 16
Lean Examples All Showed Quick response + Service quality
Richard J. Schonberger In services (more than manufacturing) quick,
queue-less response is viewed, by customers, as quality of service
Complementarily, any lack of right-first- time quality greatly and
irregularly slows service and creates queues
Slide 17
Measuring Quick Response: Toward Queue-less Service Operations
Count of units (customers, paperwork, etc.) waiting; or waiting
time Units/time waiting tells a lot: Visible, countable, comparable
marker of process improvement Hiding places for multitude of illsin
facility design, training, operations, etc. Lengthens discovery,
contaminates causal trail, magnifies a disaster Richard J.
Schonberger
Slide 18
IE Methodologies: Old and New Old: suboptimizing Functional
layout Economy of large lots/queues (EOQ) Deliberate insertion of
buffer stock/queues Automation of material handling New: The lean
core Cellular/flow layout Quick setup to minimize queues Ideal:
1-piece flow (no buffer stock/queues) Minimal, simplified material
handling Quick customer response Slow response: Long lead times
Richard J. Schonberger
Slide 19
Convergence: Lean Core and IE Models Queuing models and process
simulation... Reveal broad benefits of: Cellular/flow layout Quick
setup/readiness One-piece flow Re-focus attention... Away from
suboptimal efficiencies Toward queue-free customer service Richard
J. Schonberger
Slide 20
Measuring Quick Response: Toward Queue-less Operations Count of
units (customers, paperwork, etc.) waiting; or waiting time
Units/time waiting tells a lot: Visible, countable, comparable
marker of process improvement Hiding places for multitude of illsin
facility design, training, operations, etc. Lengthens discovery
time, contaminates causal trail, magnifies a disaster What about
measuring service employees? Richard J. Schonberger
Slide 21
Two Skits Skit 1: Requires 1 male, 1 female actor Skit 2:
Requires another pair, 1 female, 1 male Richard J. Schonberger
Slide 22
Common Management Metrics/KPIs* Outside Employees Zone of
Influence Operational KPIs: Productivity, output, on-schedule,
utilization, unit cost Unfair (Dr. Deming): 85% of causes are
management system (data, authorization, specs, training, etc.)
Ineffective: Front-line servers have small influence on complex,
aggregated measures KPIs: Too often minor-key or off-key *KPI: Key
performance indicator
Slide 23
IEs Lean Legacy: Value/Non-Value Analysis & Flowcharting
Richard J. Schonberger Value/Non-Value-Add (NVA) 5 flowcharting
symbols (Gilbreth, 1921, ASME 1946): O value-add operation 4 NVAs:
Arrow (transport) D (delay) Triangle (storage) Square
(inspection/check) Two-stage flowcharts: Gilbreth (1921): Before
and after charts Nadler (1967): Before & technologically
workable ideal system target (TWIST) Ackoff (1978): Similar
idealized design Rother/Shook (1998) VSM: Similar present state
Future state encourages management by goals and metrics (KPIs)*
*Schonberger, Best Practices (2008), 105-106
Slide 24
Ever quicker and more flexible At Atlantic Envelope Co.,
Atlanta Two cross- trained, clerks co-located behind parti- tion
cut order process time to 1 day; also plot/manage own results
Prior: 1 week thru 4 depts. Progress charts No numeric goals! No
KPIs!
Slide 25
Employees/Servers Main Concerns Capability/conditions... That
allow doing work well and safely Process data: Reveal true causes,
lead to solutions that relieve job frustrations Process improvement
needs flowing rivers of process data; gets trickling streams
Richard J. Schonberger
Slide 26
Continuous Employee Engagement Everyones Job Every day (because
they occur every day): Record (e.g., on check sheets, flip charts)
process glitches, hiccups, frustrations As they occur: Record
nonconformities, customer concerns/frowns, safety
hazards/conditions In teams: Analyze these data, generate/ process
corrective actions, invite experts help as necessary, make
presentations Richard J. Schonberger
Slide 27
Continuous Employee Engagement Everyones Job Every day (because
they occur every day): Record (e.g., on check sheets, flip charts)
process glitches, hiccups, frustrations As they occur: Record
nonconformities, customer concerns/frowns, safety
hazards/conditions In teams: Analyze these data, generate/ process
corrective actions, invite experts help as necessary, make
presentations This is low-cost, natural route to continuous process
improvement Relying too much on experts is costly,
capacity-limited, sporadic Virginia Mason Med. Center tracks PSAs
(patient safety alerts) including staff frustrations over obstacles
to patient safety) Richard J. Schonberger
Slide 28
Putting Demingand Process Datainto Quality of Service: Two
Examples Airline flight attendants: Record every customer complaint
New car sales staff: Every customer, ask/record at least two things
you dont like about that car All data consolidated, sent to (e.g.,)
a manufacturing V.P. Richard J. Schonberger
Slide 29
Lean Methodologies... in Services vs. Manufacturing Richard J.
Schonberger
Slide 30
Lean: Should Work Better in Services than in Manufacturing
Services Motivational advantage: Customers often seen (human
services are customer-facing) Losing the advantage: Services taking
their lean lessons from and following wrong tendencies of
manufacturing Manufacturing Disadvantage: Customers out of sight,
out of mind As a result: Leans focus: Shifts from effectiveness
(customer value) to efficiency (waste reduction) Process
improvement: Shifts from continuous engagement to intermittent
projects dominated by staff experts Richard J. Schonberger Where
lean services beats lean manufacturing: Striving to serve multiple
customers simultaneously
Slide 31
What Do All of These Have as Common, Beneficial Results? Quick
setup/ changeover Kanban/pull system Cells Multi-skilled work force
Total productive maintenance 5S Quality at the source Continuous
replenishment Richard J. Schonberger
Slide 32
What Do All of These Have in Common? Richard J. Schonberger
Lean-related: 5 whys Attack wastes Spaghetti diagramming
Value-stream mapping Value-add/non-value- add analysis General:
Quality function deployment Process benchmarking Design of
experiments
Slide 33
Applications in the Process Co-location/teams (work cells)
Cross-training/skills certification/job rotation Multiple
serversfor concurrent processing Quick setup, startup, readiness,
changeover Queue limitation (kanban) Visual management (5S
housekeeping, etc.) One-piece flow (small batches, small
containers) SOPs* (standard work) Fail-safing (pokayoke) Supplier
reduction Lean machines Focused factories Rate-based (takt-time)
scheduling Total productive maintenance (TPM) Widely applicable
Important in factories Adaptable in some services *SOP: Standard
operating procedure Richard J. Schonberger
Slide 34
Co-Location (Natural Teams): Leans Most Effective Concept Break
up departments, functions, silos Co-locate service people by flow
of work or flow of customers (or by product/ service families)
Disperse professional/technical staff to action zones to help,
teach, share Everyoneline or staffcross-trained Richard J.
Schonberger
Slide 35
Applications in the Process Co-location/teams (work cells)
Cross-training/skills certification/job rotation Multiple
serversfor concurrent processing Quick setup, startup, readiness,
changeover Queue limitation (kanban) via RFID/barcoding Visual
management (5S housekeeping, etc.) One-piece flow (small batches,
small containers) SOPs* (standard work) Fail-safing (pokayoke)
Supplier reduction Lean machines Focused factories Rate-based
(takt-time) scheduling Total productive maintenance (TPM) Widely
applicable Important in factories Adaptable in some services *SOP:
Standard operating procedure Richard J. Schonberger
Slide 36
High-Payoff Lean in Hospitals: Supplies, Devices, Stockrooms,
Cabinets Chronic issues: Frantic searches for right supplies while
patient waits Massive $ in supplies/devices in bulging stockrooms,
but wrong mix Healthcare: Among last to adopt barcoding R/x: RFID
being adopted everywhere Results: Leans massive low-hanging fruit
savings in $ and in better care Richard J. Schonberger
Slide 37
High-Payoff Lean in Hospitals: Supplies, Devices, Stockrooms,
Cabinets Chronic issues: Frantic searches for right supplies while
patient waits Massive $ in supplies/devices in bulging stockrooms,
but wrong mix Healthcare: Among last to adopt barcoding R/x: RFID
being adopted everywhere Results: Leans massive low-hanging fruit
savings in $ and in better care Richard J. Schonberger Precedent:
St. Alexius Hospital developed crude barcode-scan in 1970a flop;
but in 1986 started applying its own barcode stickers to incoming
items: big success! Rundle, Doctors Orders: Hospital Cost Cutters
Push Use of Scanners to Track Inventories, WSJ, 6/10/1997
Schonberger, Lets Fix It! (Free Press, 2001), pp. 211-12
Slide 38
From Quality Digest, May 2008, pp. 46-48 Photo goes here
Slide 39
Strong Tendency: Inability to Keep Lean Going, Hold Gains
Long-Term Big-Data Evidencefrom manufacturing/distribution/retail:
1600 global companies Measure of Merit: Inventory Why? Inventory
is: Customers/patients/clients waiting impatientlyto be served
Goods waiting to be ordered/made/shipped Also... Nearly every
process improvement reduces reliance on inventory Richard J.
Schonberger
Slide 40
19601975199520121985 Japan: Rise-Decline-Rise U.S.:
Decline-Rise-Decline-Rise-Decline 1960s-70s: Small Japanese sample
Rising, then falling long-term inventory turns, many companies:
Boredom/fatigue? JIT/TPSJIT/TPS fatigueJIT/TPS JIT
fatigueJITComplacency Lean fatigue Lean Richard J. Schonberger
Slide 41
19601975199520121985 Japan: Rise-Decline-Rise U.S.:
Decline-Rise-Decline-Rise-Decline 1960s-70s: Small Japanese sample
Rising, then falling long-term inventory turns, many companies:
Boredom/fatigue? JIT/TPSJIT/TPS fatigueJIT/TPS JIT
fatigueJITComplacency Lean fatigue Lean Has quality followed
similar pattern? Symptoms of weak exec. interest because not seen
as strategic? Will lean in services follow similar pattern? Richard
J. Schonberger
Slide 42
Wastes Lean: Gaining/Keeping Executive Support Focus on Wastes
Puts Cart Before Horse CusTomerCusTomer CusTomerCusTomer LeanPut
Customer (Marketing) First Provide what all customers want:
Quicker, more flexible response with better quality, higher value
Waste elimination: An enabler, not a primary Customer-first
upgrades lean from operational focus to competitive/strategic... to
gain enduring executive support Richard J. Schonberger *George
Stalk, TimeNext Source of Competitive Advantage, HBR, July-Aug.,
1988
Slide 43
Why Did Manufacturing Re-Define Lean/JIT/TPS as Reduction of
the Seven Wastesinstead of, e.g., Time-Based Competition? Richard
J. Schonberger
Slide 44
How Did Lean Come to Be Promoted(Even Defined) as Reduction of
Wastes? One answer: George Donaldsons, Chasing the Lean
Transformation,* compared 7 prominent process- improvement models
under the lens of Demings 14 principles & System of Profound
Knowledge. Six largely conformed. Not the 7 th : Womack & Jones
5 principles focus purely on variation (waste). Richard J.
Schonberger *MSc dissertation, Univ. of Buckingham, UK Supervisors:
John Bicheno, Pauline Fround (among most active lean researchers in
U.K.)
Slide 45
What Should Service Organizations Do? Professional and
management staff (faculties, too): Define/present lean in
effectiveness/competitive/ strategic termsspecifically, Deliver
ever quicker, more flexible, higher quality, higher value CUSTOMER
service. For front-line employees, same thing... But operationally,
present lean as in-the-process methodologies: cells/flow lines,
cross-training, quick setup, 5S, etc. UK National Health Service:
Bypassing terms such as lean & waste, in favor of More Time to
Care Richard J. Schonberger
Slide 46
Brief Summary: Lean in Services For strong, enduring lean,
define & promote competitive/strategic essence: Improvement in
the eyes of customers... Operationally simplified as reduction of
units (people or pieces) waiting Six sigma: Large,
multi-functional, dis- continuous projects Lean: Continual
low-level improvements fed by continual streams of data on
everything going wrong Richard J. Schonberger