Course Agenda

Course AgendaLean office overview

Definition of waste

Orientation to YESCO Hawaii

Round one of simulation

Value Stream Mapping (current state)

Implementing lean tools

Round two of simulation

Value Stream Mapping (future state)

Round three final simulation

Final Evaluation

1IntroductionsWho are you?Where are you from?What do you want to learn today??s

2What is Lean Office?Lean Office is a systematic approach applied to the value chain with an aim to streamline the business processes by:Eliminating wasteUtilizing lean techniquesResulting in: Lead time reduction and Productivity improvement

3Why Lean Office?In America today we have good people working in poor processes. What we want is good people working in great processes Michael Hammer

4Why Lean Office? Toyota Production System will not work unless it is used as an overall management system. TPS is not something that can only be used on the Production floor.

Taiichi Ohno

5Lean Office$LEAD TIME REDUCTION

66Time equals moneyLean SystemsBusiness as UsualCustomerDeliveryCustomerContactLead-TimeWasteCustomerDelivery CustomerContactLead-Time(Shorter)Waste EliminationEliminate Non-Value Added Activities77Processes have evolved over the years but may never have been mapped and recalibrated toward no wasteValue Added vs. Non-Value Added ActivitiesValue Added (VA)The customer is willing to pay for itPhysically transforms the product (or document or information)Is done right the first time

Non-value Added (NVA)Consumes resources, but does not add value to the product or service

Necessary Non-value Added (N-NVA)Does not add value to the product or service but are CURRENTLY NECESSARYCustomer Contract or specification QS 9000 or customer standardGovernment regulationCurrent state-of-the-art work method or technology

8Why Lean Office?Only 30% of the total costs are directly manufacturing

Where is the rest of the money being spent?

9Lean Organization A streamlined flow of goods or services through an organization in concert with customer demand and requirements CustomerDelightBusiness Operations1) Identify, manage or break the constraints

2) Eliminate waste and non value added work

3) Synchronize all activities toward customer delight

4) Apply an employee based cross functional continuous improvement planStreamline, Synchronize, and IntegrateProcess ViewWe can begin to reduce the complexity of an organization by implementing Lean Tools and Techniques in support processes. We can gain a competitive advantage by streamlining the organization, focusing on these four areas1010We can begin to reduce the complexity of an organization by implementing the Lean tools and techniques in the support processes. We can gain a competitive advantage by streamlining the organization by focusing on these four areas. Where are the constraints?Where is the waste in the processes?Are all processes focused on the customer?Do the employees have an understanding of the overall business?

Business Activities1111Two points:Look at how producing the parts (perform manufacturing operations) is just a small part of the big picture and is most of the value added activityLook at all the support activities and how the Lean Champion must navigate through all the functional silosSites of WastePolicies Organizational structureManagement policies and methodsMacroscopic wastes Supply chainOffice layoutMajor wastes Process and cell levelMicroscopic wastes Operator and computer level

1212DefectsOverproductionWaitingNon-utilized talentTransportationInventoryMotionExtra processing

Typically 95% of Total Lead Time is Non-Value Added!!!Value AddedLean = Eliminating the Waste2006 MMTC1313Waste of DefectsMoney and time wasted to find and fix mistakesLack of process controlsPoor work instructionsInadequate trainingData entry errorMissing informationMissed specificationsPricing error

1414What defects do you see in your company?Ask for examples Waste of Overproduction

Making multiple schedules due to system incompatibilitiesE-mails/memos to everyonePrinting extra documents just-in-caseMore information than the process requiresMore information than the customer needsCreating reports no one reads1515Ask what they see in their company. Waste of WaitingTime lost when people and resources are waiting: Unbalanced workloadEquipment break downsBatch processingWaiting for informationWaiting for copiers/faxesWaiting for customer responseWaiting for an internal response

1616Ask examples from them

Waiting Waste2006 MMTC1717Packages delivered and waiting. Where should they go? Who do they belong to?Waste of Non-Utilized TalentUnclear job descriptionsLack of trainingLack of synergy and collaborationNo feedback loop for continuous improvementSuggestions for improvements that are not investigated/utilized1818This creates a lot of waste. Errors are made, questions need to be asked with no one around who has the answers, folks working with blinders on.Waste of Non-Utilized Talent

1919The subject matter expert is not asked for her input to solve the problemWaste of TransportationPoor office layoutWalking around to correct mistakes and find answersRetrieving or storing filesCarrying documents to and from shared equipmentGoing to get signaturesTaking files to another person

2020Ask for other examplesWaste of InventoryStoring of obsolete prints and specsObsolete databases/files and foldersFiles pile up between work desksOpen projects (WIP)Office suppliesE-mails waiting to be readUnused records in a database2121Is this happening in your company? Other examples

Inventory Waste2222Looks like too much toner on hand especially since they just replaced the machine that uses itWaste of MotionLooking for items because they are out of placeMis- or unfiled papersSaving files everywhereHandling paperwork that could be electronicExtra clicks or keystrokesWorking around other open files on desk2323Ask for their examplesWaste of Extra ProcessingDoing more than is required to meet customer requirementsUnnecessary paperworkRedundant approvalsRepeated manual entry of dataUse of outdated standard formsUse of inappropriate softwareCreating hard copies of reports

2424What examples do they have?Above the Shop Floor

This pile represents over a dozen jobs. How many labor hours to produce this paper?

Tell me about this photoWhat else do you see?Are there any hidden images?Were you even going bother to look until I ask you?Waste in the Office manisnt always 26Office SimulationLets learn by doing!

2727Exercise: Break group into teams of 4-5 and spread the teams out to different white boards. Have them draw the DOWNTIME acronym and list 2 to 3 examples of each of the 8 wastes that exists in their office.YESCO HawaiiA New Division2828YESCO Hawaii OrientationYou are all employees of YESCO HawaiiPositions to be filled:- Sales- Material Control- Business Office- SchedulingEngineering- Production/InstallationProcess EngineerWe will work in batches of 5 at Sales and 1 everywhere elseWe will measure the following- # of orders shipped- # of invoices faxed- # of quote drawings completed- Work in process

29YESCO Hawaii Company PoliciesWork shift is 10 minutesKeep busy at all timesThe goal is to Install and invoice 14 orders and complete 3 new business quotes

30YESCO HawaiiRound 1

3131Metrics Scorecard32

Select an extra person to fill out this chart32YESCO HawaiiRound 2

33Make some improvements!33Make your improvements and lets try it againMetrics Scorecard34

Enter your data into your chart34 LETS GET LEANLearn the tools to recreate your WORLD35

Its all about TimeDVD3636DVD is the Time DVD showing office waste 18 mins.

Characteristics of a Lean ProcessPeople arranged in process orderOne-piece flow processesErgonomically-correct work areasPull system disciplineStandard operations defined and implementedCross-functional, multi-process associatesProcess intolerant of abnormalities3737Improves morale, safety, reduces waste Ask how?7 Steps for Value Stream Mapping with Swim LanesCreate a macro level flow of processSelect a functional area to mapDetail the stepsIdentify NVA and N-NVA stepsAnalyze the processDevelop a future mapDevelop and implement action plan38

Create Flow of ProcessHave someone sketch it up on the board392. Select Functional Area or value stream Break up departments into swim lanes2006 MMTCYESCO Hawaii Value Stream Map of business processSchedulingMaterial ControlBusiness OfficeSales40Swim Lane border (divides departments)40In this case we will look at the whole business process3. Detail the Steps

41Process Mapping GuidelinesGather the information from the actual process - go see where the work is being performedGet the real data versus the theoretical way it should be done or the way people think it is doneUse the experts (people doing the work) to develop the mapsUse the maps as a microscope on the process to allow you to see where to make improvements4242What are some examples?

Use the Experts43Explanation of Flow Diagram Symbols & ColorsDWNTIMEDescribe the process stepIf the step is Non-Value Added, which DOWNTIME waste(s) does it represent?How much time does it take to complete the process step?OValue AddedNon-Value AddedNecessary Non-Value Added What is the walk/travel distance?Color in:44Explanation of Flow Diagram Symbols & ColorsRepresents InventoryI45Explanation of Flow Diagram Symbols & ColorsRepresents a Decision46Yes or No?Explanation of Flow Diagram Symbols & ColorsConnects a process within a swim lane47Explanation of Flow Diagram Symbols & ColorsConnects steps that cross swim lanes48Explanation of Flow Diagram Symbols & ColorsRepresents electronic work/data transmission49Optional49Explanation of Flow Diagram Symbols & ColorsRepresents document Reviews, Approvals or Inspections (RAI)RAI50

4. Identify NVA & N-NVA Steps

NVAN-NVAVA51Examples of NVA ActivitiesTraveling (excess transportation or motion of people or materials)Inspecting or checking (review-approval-authorization cycles)Work reporting (done right the first time rule)Redundant or unnecessary data entrySupervisingCountingReformatting or creating duplicate copiesFiling and file maintenance5252What are some examples?5. Analyze the Value Stream Map1. Total each of the different process events

StepsTime5353SLAM swim lane analysis matrixHandout copy have them fill it outNOTE: Paste a bright green post-it near improvement opportunities that you have identified from you current state value stream map. Write a small description of the waste and how to fix it.5. Analyze the Value Stream Map (using Starbursts)STARBURST

5. Analyze the Process Map2.Identify opportunities to combine steps that occur between two or more peopleIn order to eliminate handoffs or delays3.Identify opportunities to perform work simultaneously instead of sequentiallyIn parallel instead of serially. What is the earliest a particular work step can occur?Identify opportunities where work (documents or information) can be delivered to the next person or operation one piece at a time instead of delivering work in a BatchIdentify opportunities to build into the process signals or advanced notice to downstream departments to prepare to receive or produce work5555What are some examples?Parallel vs. Serial Processing

565. Analyze the Process Map4.Identify opportunities to co-locate people doing work:To improve communicationTo reduce the effects of handoffs and of transportation distances.5.Identify opportunities to automate any of the workElectronically capture and transmit documents (scan-mail)Replace manual handoff with an electronic handoffElectronically capture and report process events and work statusReplace hard copy forms, worksheets, or spreadsheets with electronic versions, accessible from the networkElectronically combine several documents into a single database

5757What are some examples?5. Analyze the Process Map6.Identify problems which if solved will reduce time or error rate

7.Determine whether the entire process is a candidate for reengineering5858What are some examples?6. Develop Future MapNow that opportunities for improvement have been identified through the analysis step, start a new map incorporating the improvements you identified. Remember to take a picture of your before and after states.

597. Develop & Implement Action Plan Create a list of actions Prioritize the list Impact-Difficulty Grid Assign responsibility Define due dates

6060What are some examples?Impact/Difficulty MatrixEasyHardHighLowDifficultyImpact6161What are some examples?Sustaining ImprovementsRecognize that several follow-up activities may be necessary:Implementing and refining a measurement or performance monitoring systemInitiating additional improvements or corrections based on the measured results of the improved processReconvene Team representatives until the projected levels of improvement have been achieved and sustained for at least three months6262What are some examples?Exercise

Exercise Map the process!6363What are some examples?Symbols & Colors for Process MappingProcess StepSame Person StepBetween Process StepIInventoryDecisionRAIReview, Approve Inspect64Lean Tools

Fill up your Tool Box!65Establishing Takt TimeTakt Time is the pace needed to meet customer demand.If you have a Takt Time of two minutes, that means every two minutes the process is completed once.Every two hours, two days or two weeks, whatever your sell rate (customer demand) is your Takt Time. Takt Time =Your Operating Time per ShiftCustomer Requirement per Shift27,600 sec (7.67 hours)460 orders= 60 secGOAL: Produce to Demand!665S & Visual ManagementA proven method used to systematically organize, clean, and standardize the workplace

If you cant do 5S, you cant do Lean!

675S & Visual Management

Seiri Saiton Seiso Seiketsu Shitsuke SortSet-In-Order ShineStandardizeSustain Clear outConfigureCleanConformityCustom

68Elements of a 5S ProgramSort - what is not needed, sort through, then sort out; When in doubt, throw it out!Set-in-order - what must be kept; make visible and self-explanatory so everyone knows where everything goesShine - everything that remains. Clean equipment, tools and workplaceStandardize - implement best practices to keep the workplace clean and organizeSustain - making a habit of properly maintaining correct procedures5S69What is Standardized Work?Standardized Work is a method enabling employees to improve their control of operations and measure their performance against documented standards

Performance is optimized by reducing variation and waste in operations by the efficient arrangement of people, products, and machines, thus improving product quality

70Cellular / Flow ProcessingArrange people and workspace to achieve one-piece flowMinimizes wastes of: Defects Overproduction Waiting Non-utilized Talent

Transportation Inventory Motion Extra ProcessingSingle piece flowPull process controlReduced wasteImproved floor space71One Piece Flow

Consider these conditions for flow in the office setting:One piece processing versus batchPeople in process sequenceMulti-process work sequenceMulti-process skilled peopleSynchronization of operations (work balance)

72Poka-Yoke / Mistake-ProofingPoka-Yoke is the removal of all potential causes of error either through design, process, or mistake-proofing devices, to ensure consistent process resultsPoka-Yoke helps build quality into processes to achieve Zero Defects

73KaizenKai = ChangeZen = Good (for the better)Kaizen = Continuous Improvement

Kaizen has a bias for action!

74Yesco HawaiiRound 375Remember to think outside the box!75What are some examples?Metrics Scorecard76

Enter your data into your chart76Customer Service Request IT ProviderPurchasingquotes orderOrder processingReceives andSigns offService Repdefines orderMgr verifiesorderCustomer ServicePrepares formAdmin inputsTo data baseQuoteNeeded?Mgr approvesquoteQuote above $8,000?MgrapprovalMgt BoardapprovalAccount VPapprovalPurchasing fillsorderDefineorderNoNoYesYesOld Process Average 50 daysNew Process - Average 7 days Waste removedCustomerService RepMgr approvesquoteAdmin inputsto data basePurchasing fillsorderOrder processingReceives andSigns offCustomerAdmin sendsApproval notice7777The lead time to fulfill a customer service request was dramatically reduced by mapping the process and focusing on non value added work.. YESCO Las Vegas Success StoryThe business office has reduced Node 5 (last day of labor to date of invoice) from an average of 15 to 20 days to 5 to 12 days for the Exteriors Branch. The same concepts are being used to streamline the billing process for Interiors eliminating several hand offs and reducing Node 5 as well.

7878 YESCO Electronics Success Story7979Lending Process Financial Institution 10/15% 10/20% 5%60/75%90% 5% 5%Adm/clerical-filing-typing-mailing-gathering dataGeneral phoneInquiries frommembersFill in forOther staffLoan ProcessingPhone inquiriesLoans onlyFill in forOther staffLoan ProcessingTime spent by Loan Processor Old ProcessNew Lean Process after Kaizen Event8080In the banking industry revenue is generated mainly by interest received from loans. The shorter the lead time for the lending process allows more loans to be generated. This increases revenue for the bank.

In this example Loan Processor time was spent on non value added work. Reassignment of the clerical work and a new process for taking phone calls dramatically improve the time for Lending money.Keys to SuccessCreate a sense of urgencyHave a vision, communicate it continuouslyFocus on key process driversRemove all obstacles to achieve the visionCreate short term victoriesDont declare victory too soonSpeak with dataDont assumeAnalyze data doubt itMake decisions with dataTake action based on dataCheck results

8181The ideal first project is clearly and unambiguously measurable. This is not always possible for administrative Kaizens.satisfies a widely-perceived need. is a repeatable process. is self-contained, not subject to uncontrollable external influence.

8282Administrative Process ImprovementAdministrative Kaizens are often discontinuous mini-Kaizens.The team meets first to understand the nature of the project and decide what they will need to know. The current state is described. A process map may be developed. Any information unavailable at the first meeting is provided prior to the second meeting.The second meeting is generally one day. The project is analyzed and a complete action plan is developed. The plan is implemented and the outcomes are monitored. If necessary, a follow up meeting is held. 8383.The Kaizen Project TeamTeam members are selected on a project-by-project basis.There is a team leader chosen to facilitate and coordinate. The leader is not in charge in the traditional sense.The team can be comprised of:

Subject matter experts in the target area. Others in the same segment of the organization. Individuals from other areas of the organization. This includes technical staff. Individuals from outside the organization.8484The Kaizen Project TeamAn open, egalitarian structure is important.When Kaizen project work is underway, organizational position is irrelevant and disregarded. All team members are considered equal within the team.8585Key Kaizen TenetsAn open atmosphere is critical. Free thinking and contribution are necessary. Everything is open to question. No assumptions are made. A Kaizen event is not developing a list of ideas or recommendations to be studied. The outcome is implemented. 8686Now Recreate that WorldMap it with the expertsStudy your mapImplement changesCelebrateStudy and implement more changesCelebrateRepeat, Repeat, Repeat

87Questions?

8888Sheet1Goal: 14 Orders/3 QuotesRound 1Round 2Round 3MeasuresTeam 1Team 2Team 1Team 2Team 1Team 2Lead TimeWork-In-ProcessOrders Shipped/InstalledDrawings QuotedInvoiced $s$0Material Costs$0Labor Costs$0Overhead Fixed Costs ($5,000)$0Total Cost$0$0$0$0$0$0Total Revenue$0$0$0$0$0$0Profit / Loss Totals$0$0$0$0$0$0

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Sheet1Goal: 14 Orders/3 QuotesRound 1Round 2Round 3MeasuresTeam 1Team 2Team 1Team 2Team 1Team 2Lead TimeWork-In-ProcessOrders Shipped/InstalledDrawings QuotedInvoiced $s$0Material Costs$0Labor Costs$0Overhead Fixed Costs ($5,000)$0Total Cost$0$0$0$0$0$0Total Revenue$0$0$0$0$0$0Profit / Loss Totals$0$0$0$0$0$0

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Sheet1Goal: 14 Orders/3 QuotesRound 1Round 2Round 3MeasuresTeam 1Team 2Team 1Team 2Team 1Team 2Lead TimeWork-In-ProcessOrders Shipped/InstalledDrawings QuotedInvoiced $s$0Material Costs$0Labor Costs$0Overhead Fixed Costs ($5,000)$0Total Cost$0$0$0$0$0$0Total Revenue$0$0$0$0$0$0Profit / Loss Totals$0$0$0$0$0$0

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