0.

08 INTRODUCTION TO LEAN
AGENDA

1. Overview of Lean

2. Lean in the Office Environment

3. Value Streams

4. Flow

5. Pull

6. Barriers to Lean

7. Different ways of implementing Lean efforts

2
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Overview of Lean

3
 BASED ON "THE COMPLETE LEAN
ENTERPRISE"
(BOOK BY BEAU KEYTE AND DREW
LOCHER)

Purpose:
 Introduce Lean concepts
 Introduce value stream mapping
 Develop your ability to "see the waste" and "see the
flow"
 Walk away with an implementation plan with specifics
to drive real results
 Integrate Lean and Six Sigma

“Value Stream Mapping for

Administrative and Office Processes”

4
STARTING QUOTES

“We have observed that our competitors use brilliant people

within broken process and achieve mediocre results. We use
average people in brilliant process and achieve superior
results.”

“Every minute of lead time on the shop floor is created in the

office.”

“The most disrespectful way we can treat people is to have

them perform wasteful activities.”

5
LEAN THINKING DEFINITION

Fundamental Objective:
 To create the most value while consuming the fewest
resources
 Define value from the customer’s perspective
 Identify which process steps create value and which
are only waste (muda)
 Work to eliminate the root causes of the waste and
allow for one-piece, continuous flow

“Lean Thinking” by Womack, J.P. and Jones, D.T. (1996)

6
RECOMMENDED READINGS

7
BENEFITS

 Lean provides tangible benefits

 Reduces cost not just selling price
• Reduces delivery time, cycle time, set-up time
• Eliminates waste
• Seeks continuous improvement
 Improves quality
 Improves customer ratings and perceptions
 Increases overall customer satisfaction
 Improves employee involvement, morale, and company
culture
 Helps "transform" organisations
8
 FORD PRODUCTION LEAD TIME 1926

Monday

7:00 PM Ore boat docks at River Rouge plant.

Tuesday

10:55 AM Ore reduced to foundry iron 16 hours later.

12:55 PM Cylinder Block Cast

5:05 PM 58 machining operations on casting in 55

minutes

6:00 PM Motor assembly takes average of 97 minutes

7:45 PM Finished motor loaded on railcars for

assembly plant
9
FORD PRODUCTION LEAD TIME 1926

Wednesday

8:00 AM 4-hour assembly time at standardised
assembly plant

12:00 PM Dealer takes delivery of car

41 Hours

Conversion of Raw Material to Cash

10
 LEAN ENTERPRISE
Define Value and
ID the Value Stream Eliminate the unnecessary
steps in the value stream Make Value Flow
Normal vs. Abnormal
VA NVA

Kaizen

In pursuit of Perfection As pulled by the Customer

You can’t see all the waste
until you strip away waste

Don’t Automate Waste

“Executive Summary of Lean Thinking” by Womack, J.P. and Jones, D.T. (1996)

11
 EXPOSE WASTE TO DRIVE IMPROVEMENT
"MAKE PROBLEMS VISIBLE"

RAW MATERIAL FINISHED PRODUCT

TO CONSUMER

SEA OF INVENTORY
QUALITY LINE LACK OF
LONG
POOR PROBLEMS IMBALANCE HOUSE KEEPING
SET-UP
SCHEDULING TIME

MACHINE
VENDOR ABSENTEEISM COMMUNICATION
BREAKDOWN
LONG DELIVERY PROBLEMS
TRANSPORTATION 12
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Lean in the Office

Environment

13
 INDUSTRIES DEPLOYING LEAN SIX
SIGMA IN
THE OFFICE ENVIRONMENT

 Advertising  Hotels & hospitality

 Banking  Insurance
 Computer services &  Logistics and
outsourcing distribution services
 Document  Professional services
management  Sales & marketing
 Energy services  Transportation
 Field & technical  Manufacturing
services  Healthcare
 Financial services  Transactional
 Telecommunications processes in
 Construction manufacturing
• and even Government
14
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Value Streams

15
 VALUE STREAMS
“Whenever there is a product (or service) for a customer,
There is a value stream. The challenge lies in seeing it.”
(Womack & Jones)
• Raw Material to Customer – Manufacturing
• Concept to Launch – Engineering
• Order to Cash – Office Functions

Examples of office functions:

• Quoting • Accounts Receivable
• Order Entry • Accounts Payable

• Purchasing • Service & Warranty Support

• Service Industries
• Credit Checks
• Others?
• Human Resources
• Shipping/Receiving
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 VALUE STREAM MANAGERS

Each Value Stream needs a Value Stream Manager

Process 1 Process 2 Process 3

Kaizen
• For product and/or service ownership beyond
function
• Assign responsibility for the future state mapping
and implementing lean value streams to line
managers with the capability to make change
happen across functional and departmental
boundaries.
• Value Stream Managers should make their progress
reports to the top manager on site.

17
 VALUE STREAM IMPROVEMENT VS.
PROCESS IMPROVEMENT
VALUE STREAM

Customer
Sales Engineering Purchasing
Service

 Value Stream improvement looks at ALL steps, both value-added and non
value-added, required to complete a product and/ or a service from
beginning to end
 Process improvement typically narrowly looks at improving the value
added processes only without context on the entire system or value
stream

18
 Design
Manufacturin
g
Technology
Industrial
Engineerin
Finance
g
Corrective
Action Finance
Board
Procuremen
t Finance
Manufacturin
g
Engineering
Procurem
ent
Tool
Engineering
Finance

Production
Control
BOUNDARIES

Quality
Engineering

Scheduling
Finance

Scheduling
Receiving

Manufacturin
Scheduling
g
Manufacturin
Procurem
Technology
g
ent
Manufacturing
Technology
Technology

Customer
Support
Scheduling
Finance
M&P
Value Delivery Process is not Facilitated by Functionality

Functional Organisation

Stres
Manufacturin
s
VALUE STREAM CUT ACROSS FUNCTIONAL

g
Technology
SP
Focusing on the Value Stream Ensures Process Oriented System Thinking

C
19
 LEAN ENTERPRISE

Value Added
Any activity that increases the market form or function of the
product or service. (These are things the customer is willing to pay
for.)

Non-Value Added (Waste)
Any activity that does not add market form or function or is not
necessary. (These activities should be eliminated, simplified, or
reduced.)
Business Non-Value Added ("Required Waste")
Any activity that is Non-Value Added but is required.

20
 DEFINING THE VALUE OF AN ACTIVITY

Is the Yes
Is the good Yes
Is it done Yes
customer willing or service being for the first
to pay? transformed? time?
No No No

Is it a
business
requirement?
No Yes

Business
Non-Value Added Value Added
Non-Value Added

21
 THE CONCEPT OF VALUE ADDED

Value Added (≈3

Example: to 5%)
• Satisfying customer Requirement

Waste (≈85%)
Examples:
• Excessive Walking
• Waiting time
Examples: • Paper storage
• Type in information first time • Paper sorting
• Get paper • Correct defects
• Answer customer call • Transport

Business Non-
Value
Added (≈10 to
15%)
22
 8 TYPES OF WASTE – "DOWNTIME"
MANUFACTURING - OFFICE

1. Defects – Correction, errors in documents

2. Overproduction - Doing unnecessary work not requested
3. Waiting for the next process step
4. Non-engaged Employees - Under-utilised employees
5. Transportation - Transport of documents
6. Inventory - Backlog in work queues
7. Motion - Unnecessary motions
8. Extra Processing - Process of getting approvals

Three New Wastes:
Inappropriate systems, wasted utility resources, wasted materials

back
23
 DEFECTS - REWORK, CORRECTION, ERROR
IN DOCUMENTS

Manufacturing
Office
 Rework loops
 Missed process step
 Workers do not
understand job
 Lack of training
 Any part defect
 Missing components
 Out of specification
parts
 Any work requiring re-
work
 Rework loops (work
arounds)
 Incomplete forms
 Workers who do not
understand forms
 Lack of training
system
 Order entry error
 Purchase Orders not
matching quotation
 Errors – typo’s,
misspelling, wrong
data
24
 Etc.
OVERPRODUCTION - DOING UNNECESSARY
WORK

Manufacturing
Office
 Running any product  Working on next
that does not have an weeks items
immediate customer  Do easy things first
demand  Reports not in
unusable form
 Working ahead
 Too many consultants
 Too many reports
 Printing paperwork too
soon
 Etc.

25
 WAITING

Manufacturing
 Unbalanced operations

Office
 Operators idly watch
 Unbalanced functions
automated machines
(P.C.’s.)  Long and inconsistent
lead times
 Machine downtime
 Customer demand
 Long and inconsistent lead
fluctuations
times
 Undisciplined
 Continual production
meetings
schedule fluctuations
 Waiting for information
 Undisciplined
or "Expert"
meetings
 System downtime
 Waiting for
information or  Waiting – for
"Expert" information, at
meetings, etc.
26
 NON-ENGAGING EMPLOYEES,
UNUSED PEOPLES SKILLS AND CREATIVITY

Manufacturing and Office

 Unclear job descriptions
 Unclear expectations
 Un-engaged employees
 Employees without a clear sense of direction
 Ambiguous goals and objectives
 Specialist not utilised in their area
 Etc.

27
TRANSPORTATION – TRANSPORT OF
DOCUMENTS

Office

Manufacturing
 Any non-value added
 Any movement of moves of documents
product (i.e. between processes
movement between
 Send papers to
departments)
archive
 Send physical
documents between
locations
 People travelling
between locations
 Travel to other
locations to get papers
 Movement of
paperwork
 Etc.
28
INVENTORY - BACKLOG IN WORK QUEUES

Manufacturing
Office
 Batch processing  Batch processing
 Forecasting - weekly  Weekly schedules
schedules  Consolidation of multi-
 Work in process site financials
 Finish goods inventory  Full in baskets
 Obsolete
databases/files/folders

29
MOTION

Manufacturing and Office

 Poor workstation configuration
 Poor workstation to workstation configuration
(non cellular)
 Standardised Work not implemented
40

35

 Walking to get materials

OVEN
33

31
Bench
 Cluttered work areas
Press
21

19
23
Tool
Box 26

14
22 8
2
24
4 9
Trash
6 10
39 3018
13 12 16 20 34 38

 Walking to/from copier

44
42 32
28 Part 15
Vice 41
Box 17
36

 Poor office layout

43
29 25 3 1 5 7
37 27
11

Parts Rack
 Etc.

30
EXTRA PROCESSING

Office
 Standards unknown /

Manufacturing unclear to operators
 Any processing not
 Customer specifications
required by the
vague or fluctuate
customer
 Output reviewing and re-
 Manufacturing to a
reviewing occurs
tighter tolerance than
required  Functional departments
have unaligned goals and
poor communication
 Re-entering data
 Too many signature levels
 Unnecessary e-mails
 Etc.

31
CLASS EXERCISE: IDENTIFYING WASTE

 Break into groups

1. WO (Waiting, Overproduction)
2. DM (Defect, Motion)
3. EI (Extra processing, Inventory)
4. NT (Non-engaged Employees, Transportation)
 Brainstorm at least 2 examples of each and list on flip chart
• Factory
• Office
• Warehouse
• Home
• Restaurant
 Present results the class

32
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Flow

33
 CUSTOMER/SUPPLIER CONNECTIONS
Requests through phone, paper, computer, etc.

B C

Responses may travel through several means.

One way to make requests that means only one thing.

B C

34
SIMPLE AND SPECIFIC FLOWS

A C E

B D F
the flow is NOT simple and specific

A B C E F
the flow is simple and specific
35
 THREE TYPES OF FLOW

1. Is there good WORKER Flow?

2. Is there good MATERIAL Flow?
3. Is there good INFORMATION Flow?

In a office environment more often then not we are dealing with

information flow - What is actual flowing?

• Paperwork
• Electronic documents
• Information bit
• Messages
36
 MANUFACTURING FLOW – BEFORE LEAN

Organisation by machine type with convoluted flow.

Maximise departmental efficiency and hide problems.
LATHE LATHE LATHE
LATHE

• Traditional batch and queue

PART FLOW
500pcs.
• Lack of value stream systems
MILL MILL MILL
thinking MILL MILL

• Very little focus on between the 750pcs.

operations GRINDER
GRINDER
GRINDER

• Very large inventory 250pcs.

DRILL
DRILL DRILL

37
 MANUFACTURING FLOW – AFTER LEAN

U-Shaped one-piece flow cell.

Maximise value stream efficiency and expose problems.
PART FLOW

• Batch size of 1

• Value stream approach

• Waste between the operations is

eliminated

• Management of process is very

visual

• Non-standard conditions is very

apparent

38
 SMALL BATCHES OF WORK
No Good

Monday 40 A Why such a "routine"?

Tuesday 10 A, 30 B
Wednesday 20 B 20 C
Better: Every Type Every Day
Thursday 40 C
Friday 20 C, 20 A Monday: 14 A, 10 B, 16 C

Important:
Eliminate all reasons to "batch"! Even Better: Every Type Every Hour
Discipline to flexible processing!
7AM: 3A, 2B, 3C
9AM: 4A, 2B, 2C

39
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Pull

40
 PULL VS. PUSH SYSTEMS

Push
 Resources are provided to the consumers based on
forecasts, schedules or "when we get to it."

Pull
 A method of controlling the flow of resources (people,
information) based on pre-establish rules, and actual
status of the system at any time.

Flow where you can and pull where you must!

41
PULL SYSTEMS

 Pull System is a flexible and simple method of

controlling/balancing the flow of resources.
 Eliminate waste of handling, storage, expediting,
obsolescence, rework, excess paperwork.
 Pull System consists of:
• Processing based on actual consumption
• Low and well planned work in process (paperwork)
• Management by sight, improved communication

42
PULL SYSTEM EXAMPLES

 Kanban system controlling the flow of product in a plant

 Vendor managed inventories (VMI)
 "FIFO lanes" in offices with established rules to trigger
reallocation of resources
• Check out line at a fast food restaurant
• Phone queue systems
 Print on demand (e.g. reports)
 Paperwork "supermarket" (e.g. sales literature)
 Maintaining a "pool" of human resources (e.g. resume
on file, temporary resources)

43
 PULL SYSTEM EXAMPLE

FIFO Rules
1. Process all orders in queue in a first-in-first-
03, 3:00PM out (FIFO) basis.
2. The "supplying" process should stop when
1:00PM the maximum allowable number of orders is
reached. The "supplier" can perform other
activities, or can assist the "customer"
10-1-03, 9:00AM
process.
3. The supplying process should continue when
the minimum number of orders is reached.
Maximum = 3 orders
Minimum = 1 order

44
 Partially based on the book:
“The Complete Lean Enterprise”
Beau Keyte and Drew Locher

Barriers to Lean

45
 CHARACTERISTICS OF OFFICE WORK TODAY
Functional Silos
Org Chart Budget

Own set of language that does not have its roots in manufacturing
 Positions are based on organisation structure rather than work
flow
 The budget process does not promote systems thinking
 Work flow is trapped in functional silos and delayed by hands off
and approvals
 Each office process has a language all its own foreign to
traditional lean speak
 Resources are not allocated by process deliverables

46

Different Ways of
Implementing Lean Efforts

47

Slide 47
IMPLEMENTATION OF LEAN

1. Value Stream Mapping

2. Lean Kaizen Workshop
3. Tool Kaizen
4. On-Going Lean Activity

48
1) VALUE STREAM MAPPING

A Value Stream Mapping effort completed during the

project could occur:
 Over a series of mapping sessions in project team
meetings
 In rapid event where all team members are engaged
for a focused / dedicated time period
• Typically called a Kaizen event, Kaizen blitz or Kaizen
workshop

49
2) LEAN KAIZEN WORKSHOP

The advantages of a Lean Kaizen Workshop are:

 Resources are 100% dedicated during the event
 Drastic results are achieved within a few days
 Excellent method to involve and engage employees
 Train people by applying methods to a real case and
get tangible results

50
 TYPICAL LEAN KAIZEN WORKSHOP
(TYPICAL AGENDA)
PREWORK EVENT WEEK POST EVENT

FIRST DAY DAYS 2, 3 OR 4 LAST DAY

SELECT TEAM MAKE CHANGE MAKE CHANGE MAKE THIS THE EVENT EVALUATION
KICK-OFF:
We get these
Goals
NEW STANDARD AND FOLLOW-UP
EVEN T
TEAM SE LEC TIO N We measure progress
PD/GOALS with these
Driver Measures
/Event Objectives

Countermeasures
We do these (LM Tools)

REFRESHER
TRAINING REVIEW REVIEW
CLASSROOM PROGRESS PROGRESS
TRAINING TO-DO LIS T TO-DO LIS T
D O C U MEN TIN G REALITY DOCUMENT
TIME OBS ERVATIO N REALITY SUMMARIZE, PRESENT, IF NECESSARY,
AND CELEBRATE EVENT CLOSURE:
ID THE EVENT S UMMARY TO-DO LIST
GOALS AND RESULTS
WASTE
G O ALS

VERIFY
DRIVERS

G O A LS /
PREPARE D R IV E R M E A S U R E
M A T R IX TOOLS MAKE CHANGE CHANGE
PD PLAN
DRIVERS

DR IV E R ME A S UR E /

MATRIXES TOOLS
CO UNTER ME A S UR E

COUNTER MA TRIX
D RIVERS

D R IV E R M E A S U R E /
C O U NT E R M E A S U R E MEASURES
M A T R IX
N QUANTIFY DO IT AGAIN! VERIFY
PREPARE EVENT REALITY RESULTS CHANGE
W LE AN E
OBJECTIVES CHECK ?
QUANTIFY
EVENT S UMMARY TEAM
S
TEAM TEAM RESULTS
GOALS AND R ES ULTS T O- DO L IST

LEADER
TO - DO L IS T
TO -DO LI S T

LEADER LEADER
MEETING WITH MEETING WITH MEETING WITH MAKE THIS THE
CONSULTANT CONSULTANT CONSULTANT NEW
STANDARD

51
 3) TOOL KAIZEN

Implementation of Lean principles to very specific process

area in a rapid event.

Example:
 Office 5S
 Kan-ban system
 Standard Work
 Poka Yoke
 Etc.

Improvements are done locally (within dept or area)

52
4) ON-GOING LEAN ACTIVITY

Implementation of Lean principles to every day activities.

Example:
 Inventory level reduction
 Lead-time reduction
 Quality Inspection reduction
 Non-value added operations elimination
 Etc.

53