5 -how to determine a lean project

How to Determine and Define a Lean Project

Setting up and Running Your Lean Project

Thursday, November 29, 2012

3:15 – 5:00 p.m.

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Core Competencies

Business Consulting Services� Strategic Planning & Execution

� Building Centers of Excellence

� Program Management

� Project Management

� Vendor Partnerships

People� Change Management

� Organizational Design

� Training

� Talent Assessment

� Project Resourcing

� Recruiting / Staffing

Technology� Application Development

� Service Oriented Architecture

� Database development and management

� Web/ Internet development

� Systems development and management

� ERP / PDM / CRM Implementation, Migration

� Network administration and support

� E-commerce and e-business

Process� Business Process Management

� Roles and Responsibilities

� Business and IT Requirements

� On-line SharePoint Documentation

� Staffing Models

� Metrics

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• How to determine a lean project?

• How do you prioritize issues to determine what

should be a lean project?

• Who is on the team?• What are the roles of each member of the team?

• How do you define the problem?

• How do you determine the project objective?

You Asked For…

• How do you determine the project objective?

• Determining success• What data should be collected?

• Tracking progress

• Reporting progress

• Staying on task – How do you handle issues that

come up but are not directly related to the

defined project?

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• Welcome and Introductions

• Overview of Lean• What is it?

• Value Added / Non-Value Added

• Overview of Waste

• Where to Find and Prioritize Projects

Agenda

• Improvement Process• 0.0 Organize Team

• 1.0 Define

• 6.0 Track, Update, and Provide Update

• Walter’s Top 10 Project Team Tips

• Wrap Up

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Identifying Waste

• Value Added and Non-Value Added

• 8 Wastes

• Where I Typically See Waste

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A systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement

Typical Results:

• Reduced Cycle Times

Defining Lean

• Reduced Cycle Times• Streamlined Workflow

• Standardized Tools and Templates

• Less Rework

• Eliminate “Administrivia”

• Reduced Costs

• Improved Customer Satisfaction

• Improved Employee Satisfaction

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Value Added

• Any activity that increases the form or function

of the product or service. (These are things the

customer is willing to pay for)

Definition of Value Added

Non-Value Added

• Any activity that does not add form or function

or is not necessary. (These activities should be

eliminated, simplified, reduced or integrated)

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Lean = Eliminating the Waste

Consider that 60 to 80 percent of all cost related with meeting a customer

demand is an administrative or non-production-related function.

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8 Areas of WasteWaste Definition Examples

1. Waiting (people and

material)

Inactive or lost time created when material,

information, people or equipment is not

ready

• Hardware, Access, requirements, work

requests

• Waiting for a signature

•

2. Non-Value Added

Processing

Efforts that create no value from the

customer's viewpoint.

• Detailed reports that no one reads

• Deliverables that aren’t really used

•

3. DefectsWork that contains errors, rework, and

mistakes or lacks something necessary.

• Errors on reports

• Wrong form sent to customer

•

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4. MotionAny motion that is not necessary to

successfully complete an operation or task.

• Long treks to copy or coffee machine

•

5. TransportationMovement of materials, products or

information that does not add value.

• Hardcopy mail

•

6. OverproductionProducing too much or producing it before it

is needed.

• Reports that are too early

•

7. InventoryMore information, project, material on hand

than the customer needs right now.

• Storage and search of e-mails

• “In-baskets”

• Excessive laptops sitting around

•

8. Underutilized PeopleNot using people’s mental, creative, or

physical capabilities

• Sales people doing administration work

Activity: Read the Wastes – Come up with 3 additional examples

• Get each process to produce only what the next

process needs when it needs it

• Orchestrate (control, manage, regulate)

operations to get ever closer to this ideal, ever

Focus On and Reduce Cycle Time!

WORK ORDER DELIVERY

operations to get ever closer to this ideal, ever

shortening the lead time.

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1. Duplicative Reports / Unnecessary Reports

2. Reentering Data

3. Hardcopies

4. “Spreadsheets”

Places I Commonly See Waste

5. Can’t Find Stuff

6. Effective Use of Available Tools

7. Meeting “Minutes” – Work On-Line / Real Time

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Spreadsheet Hell

Results:

15 People / 4 hours per week ($156k)

5 People 80 Hours ($20k)

The No-Read Report

Identifying Waste

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“Get Me the No. of Policy Endorsements by Customer”

Where do you see waste?

• What can we eliminate?

• What can we do less of?

• What can we streamline?

• What could we do more of?

(to become more efficient)

Finding Lean Projects

Where Do You See Waste / Opportunities?

(to become more efficient)

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Waste Potential Project

The two most common customer complaints are...

Finding Lean Projects

Customer Analysis

Customer Complaint Potential Project

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Imp

act / P

ay

off

Sm

all P

ay

off / Im

pa

ct

Quick Hit Ideas� TBD

Caution Ideas• TBD

Gem Ideas Extra Effort

Payoff Matrix

Imp

act / P

ay

off

Big

Pa

yo

ff / Imp

act

Gem Ideas Extra Effort

Easy Implementation Tough Implementation

Implementation

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Our Potential Capacity18

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Our Performing Capacity

20Limiting Factors = Waste

Process Improvement

• DMAIC Process

• 0.0 Organize Team

• 1.0 Define

• 2.0 Measure

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Track, Update, and Provide Status

p r o c e s s i m p r o v e m e n t m e t h o d o l o g y

Measure

22Analyze

33Improve

44Control

55Improvement

Project

Implemented

Define

11Organize

Team00

Proposed

Project

Process Improvement

Implemented

2.0 MEASURE�How big is the

current problem?

�How often, when,

how many, etc?

0.0 ORGANIZE TEAM�What’s the high-level

problem, goals, and

objectives?

�Who’s should be on the

team?

�Meeting Logistics

3.0 ANALYZE�Why is the problem

happening?

�How do you know?

4.0 IMPROVE�Develop Solutions

�Redesign Process

�Develop Recommendations

�Approval

�Implement

1.0 DEFINE� Who’s the customer?

� What do they need?

� What’s the problem?

5.0 CONTROL�How will you make

sure it will stick?

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0, 1 = Never heard of this before or just a little familiar

2 = Somewhat familiar with this, but I've never done it

3 = I am familiar and have experienced it

Assessment

Process Improvement Experience

4 = Yeah, I know this, I'm on it

5 = I am very experienced with this – I’ve lead a team or teach it

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0.0 Organize Team

0.0 Organize Team� What’s the high-level problem, goals, and objectives?

� Who’s should be on the team?

� Meeting Logistics

Possible Deliverables� Draft Project Team Charter

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� Draft Project Team Charter

� Team Roles

� Executive Sponsor

� Business Owner / Team Lead

� Team members

� Problem Summary, Goals, and Objectives

� Team Meeting and Logistics Plan

Project Team

CORE TEAM Role City E-mail Phone

Bob Miller Executive Sponsor Monona

Patrick Marsh City Administrator Monona

Bill Burns City Administrator Verona

Matt Giese Village Administrator Cottage Grove

Matt Davis City Administrator Middleton

Mike Probst Clerk/Personnel Dir. Stoughton

Monette McGuire Purchasing Services City of Madison

Walter A. Jankowski Facilitator Madison

Brian J Chapman Co-Facilitator Oshkosh

Pam Hoffman Co-Facilitator Madison

Liz Menzer Exec. Director WCPE

Gary Becker Exec. Director LGI

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How We Will Work TogetherRoles and Responsibilities

Team Role Responsible For Lead / Team

Executive Sponsor • Accountable for removing barriers and ensuring the team’s success

• Provides updates and status to DCCVA Executive Committee

TBD

Team Lead • Accountable for leading and guiding the team to meet the project goals and producing the agreed deliverables within the timeframe

TBD

Team Member • Individuals formally assigned to the team who contribute time, skills, and effort

TBD

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contribute time, skills, and effort

Subject Matter Experts

• Provides need expertise knowledge, and experience on a technical topic or process

TBD

Communication Director

• Identifying and helping to develop team communication plan

TBD

Process • Gathering and maintaining team’s core process work (current and future state)

TBD

Data Collector • Gathering and maintaining team’s data collection work

• Helping to analyze collected data

TBD

Facilitator • Serves as the Lean/Six Sigma expert, provides coaching / expertise throughout the project and is accountable for establishing and meeting the timeline

TBD

1. Discussions should be inclusive, transparent, and inspires trust in one

another and with other campus units.

2. Recognize and value the expertise of all team members through listening,

clarifying, encouraging, being open, and not interrupting.

3. Assume that differing points of view are NOT meant personally. At the

same time, no personal attacks on other members.

4. Whenever possible, bring up potential solutions at the same time as

How We Will Work TogetherSuggested Team Ground Rules and Expectations

4. Whenever possible, bring up potential solutions at the same time as

pointing out problems.

5. In general, let’s attack and improve processes (not people)

6. If possible, conflicts can be discussed and resolved openly at team

meetings. Alternatively, individual team members should feel free to

discuss individually with Team Leader or Black Belt.

7. Silence does NOT mean consent or dissent; team members are

responsible to make their viewpoints known.

8. Make the commitment – come, participate, be on time, get work done

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1.0 Define

1.0 DEFINE� Who’s the customer?

� What do they need?

� What’s the problem?

Possible Deliverables� Final Project Team Charter

� Problem Summary

� “Elevator Pitch” of Problem

High Level Process Map

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� High Level Process Map

� Voice of Customer Analysis

� Critical to Quality Conversion

� Stratifying and Pareto Analysis of First-Cut Process Data

� Stretch Goal

� Stretch Goal Baseline Data

� Cost of Poor Quality Analysis

� Walk the Process

� Lean Waste Identification

� Initial Change Management Plan

� Preliminary Communication Plan

Joint

DirectExternal CustomersPeople that are directly impacted or perform the purchasing process

1.0 Define

Key Stakeholders

IndirectI. Local Suppliers

B. Department Heads

A. Chief Elected Official

E. Finance Director

F. Purchaser

G. Building Maintenance Staff

H. Police Chief

D. City Manager / Administrator

C. Finance Committee Chair

PurchasingKey

Stakeholders

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IndirectExternal CustomersPeople that are indirectly impacted by city services

Internal Customers

O. Department Heads

K. Elected Officials

N.

M.

L.

P. Frontline Supervisors/Managers

Q. Frontline Employees

1.0 Define

Key Stakeholder Needs / Requirements

City / Village Manager / Administrator Comments

1 Help me reduce my expenses

2 Ensure we are in compliance with my internal policies and any State or County regulations

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Department Heads• DPW Director or Street Supervisor

• Police Chief

Comments

1 Help me reduce my expenses

2 I need to make timely purchases – when I need it

3 Make it easy for me to know what items are available

4 Make it easy to purchase an item

5 Make it easy for me to opt in or out of purchase

6 Show me what I saved or am able to save

• Current political environment demands more

efficient stewardship of resources

• Need to systematize best practices and

knowledge sharing between governments

• Each entity does not have the resources to do

Why This? Why Now?

• Each entity does not have the resources to do

this individually

• We would like to help build capacity and

leverage resources

Problem StatementProblem StatementIn one sentence, what’s the problem?In one sentence, what’s the problem?

Project VisionProject VisionSo, what is the desired future state or vision?So, what is the desired future state or vision?

1.0 Define

Project Definitions

The cities and villages of Dane County have not taken advantage of market

competition opportunities available through joint purchasing.

So, what is the desired future state or vision?So, what is the desired future state or vision?

We seek to establish for Dane County cities and villages a centralized purchasing system

that effectively and efficiently directs the available resources.

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Elevator SpeechElevator SpeechIn one sentence, what is the team working on?In one sentence, what is the team working on?

The cities and villages of Dane County are working together to create a joint

purchasing system that we think will save the taxpayers’ money by using

economies of scale.

Receive Product or Service

High-level Internal Billing ProcessFrom Perspective of People That Purchase Internal Products / Services

Know Status of Order

Receive Bill / Invoice Validate Charges22

Place an Order for a Product or Service

0.0 PLACE ORDER� What do you want to purchase?� How much?� Funding Source

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Reconcile44

Able to Ask Questions of Biller66

Reconciled Account“Checkbook Balance”

i n t e r n a l b i l l i n g p r o c e s s

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1.0 RECEIVE PRODUCT OR SERVICE

2.0 RECEIVE BILL / INVOICE

� Gather all charges� Quantity� Completion %� Charges incurred from outside

vendors� Charge for internal services

� Calculate Total Bill� By Department� By Funding

� Create Invoice� Send to Designee

3.0 VALIDATE CHARGES

� See it in system� Compare Invoice / Statement� Was it the right order?� Was it received?� Is it the correct amount?� Is it the correct funding source?� Determine if we are going above

estimate

Able to Ask Questions of Biller664.0 RECONCILE

� Correct errors� Transferring charges� Dispute charges� Update Promised and Pending

Receive Product or Service

High-level Internal Billing ProcessFrom Perspective of People That Purchase Internal Products / Services

Know Status of Order

Receive Bill / Invoice Validate Charges22

Place an Order for a Product or Service

0.0 PLACE ORDER� What do you want to purchase?� How much?� Funding Source

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Reconcile44

Able to Ask Questions of Biller66

Reconciled Account“Checkbook Balance”

i n t e r n a l b i l l i n g p r o c e s s

0.0 PLACE ORDER ISSUES1. Information gathered at time of purchase is inconsistent or incorrect

• Wrong funding string when ordered (blocking, expiration dates, etc.)• Purchasers don’t provide who the bill goes to

2. Purchasers don’t know process

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1.0 RECEIVE PRODUCT

OR SERVICE

2.0 RECEIVE BILL / INVOICE

� Gather all charges� Quantity� Completion %� Charges incurred from outside

vendors� Charge for internal services

� Calculate Total Bill� By Department� By Funding

� Create Invoice� Send to Designee

3.0 VALIDATE CHARGES

� See it in system� Compare Invoice / Statement� Was it the right order?� Was it received?� Is it the correct amount?� Is it the correct funding source?� Determine if we are going above

estimate

Able to Ask Questions of Biller664.0 RECONCILE

� Correct errors� Transferring charges� Dispute charges� Update Promised and Pending

3.0 VALIDATE CHARGES ISSUES1. Not enough detail in charge description to understand what the charge

is2. Descriptions are not consistent3. Review / Edit / Reallocate Charge

• Can’t always review / edit charge BEFORE posting• Some do not allow to reallocate charges

4. No Biller contact information5. No projections of upcoming internal bills

2.0 CHARGES / BILL ISSUES1. Posting of Charges

• Charges are not posted timely or are on an inconsistent schedule (varies from dept. to dept. – especially smaller units)

• Not able to see pending and estimated charges and then match at EOM

2. Funding string might not have $ (grant out of funding / not valid). Biller then has to “run down” funding source. No ability to block a grant from being charged

3. Charges are sometimes not in month billed4. Invoices vary – no single tool to produce

invoices5. Bill goes to wrong person6. Insufficient oversight / support

1.0 Define

Project Charter: Joint Purchasing

TeamExecutive Sponsor Mayor Bob Miller – Monona

Team Lead/Bus. Owner Pat Marsh - Monona

Team Members Bill Burns, M Davis, M Giese, N Probst, Stephen Bechler, Monette

Mcguire

Other Res: B Chapman, L Menzer, W Jankowski, G Becker

ProjectProblem

Statement

The cities and villages of Dane County have not taken advantage of market

competition opportunities available through joint purchasing.

Project

Mission &

Vision

We seek to establish for Dane County cities and villages a centralized

purchasing system that effectively and efficiently directs the available

resources

TimeframeStart Date October, 2012

Presentation to Sponsors December, 2012

Solution Delivered Jan-Feb, 2013

Estimated Costs / ResourcesTeam Member Time 4 hours / week - 6 weeks

Facilitator 60 hours – FREE for 1st Project

Misc. Expenses $500

Approach• Focus on execution and follow the 80/20 rule

• Perform projects like “Kaizen” events (short duration)

• Challenge the status quo

• Collaboration across all communities

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Vision resources

Project

Goals

� Develop joint purchasing structure including scope, process, and

methodology for a joint purchasing program among DCCVA members

� Reduce the overall $ spent by participating communities on selected

purchase items

� Document actual savings

� Create an easy, “opt-in” joint purchasing program that leverages the

purchasing power of several communities

� Increase the cooperation among DCCVA members for joint benefit

Benefits / Business CaseReduce

Expenses

• We will collect data but we anticipate significant savings

Work Packages Upcoming Tasks� Define Scope of Potential Products / Services

� Research Best Practices and Who’s Done This Before

� Data Gathering / Finance Team: How much has been spent, track savings

� Process: Define Program Structure, Process, Policy and Procedures, Guidelines

/ Ground Rules

� Technology: How can we make this easy, on-line for purchasers and vendors

� Communication / Training / Marketing

� Form Steering Committee

� Set-up Meeting Logistics

� Plan and Execute First Meetings

� Start Collecting Data

� Start Researching existing purchasing processes and Programs

• Collaboration across all communities

• Avoid complexity--keep it smart and simple

• Follow formal, proven methodologies

Risk & Dependencies• Consensus / agreement by all government entities on

approach and program

• Approval by local elected officials

• Adoption by core number of members

• Communities wanting to “buy local” only

2.0 Measure

2.0 MEASURE� How big is the current problem?

� How often, when, how many, etc?

Possible Deliverables� Operational Definitions of Processes

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� Operational Definitions of Processes� Data Collection Plan� Actual Data Collected� Pareto Diagram� Histogram� Run Chart� Travelers� Measuring Process Cycle Time

� Measurement Action Plan

What Data Will We Need?

Question Data to Collect Who

How much is spent for each item?

• What’s the dollar spend for the last three years?

• How many transactions?

• Do we have cycle time data?

• Do we have particular purchasing time for particular items (“lawnmowers in March”, purchasing fleet vehicles in Aug – new)?

• Survey to all communities

What items are “in scope?”

How much are we saving?

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How much are we saving?

How do we consider local vendors vs regional?

What is the mechanism, rules, and guidelines for actually making a purchase?

How many people actually purchase items?

And which roles?

How do we satisfy the attorney’s?

How do we handle late payments?

How much time and resources to negotiate contracts?

6.0 Track, Update and Provide StatusDisciplined Project Execution

6.0 Track, Update and Provide StatusDisciplined Project Execution

Quick Hit ProjectsProject Plan

Communication Plan

Project Success Measures

10 Tips for Building Your Project Team

Wally’s Top 10 Team Tips

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Tip 10:Wally’s Top 10 Tips for Building Your Team

• Set Direction

• Mission / Vision

• What Do We Need to Accomplish?

• Establish Urgency

Direct - Establish Urgency - Demand

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• Establish Urgency

• Develop the Burning Platform

• Demand Performance

• Failure Is Not an Option

• What Do You Need?

• First Meetings Are Crucial

• Make a Splash – Shake It Up

• Do Something Different

• Plan a Meaningful, Tight Agenda


Set The Tone

• Start with “Icebreaker”

• Get Team Talking Within the First 90 Seconds

• Relevant to Meeting Agenda

• Team Members Pay Attention to Leaders

• What You Do is More Important Than What You Say

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• Have the Discussion

• What Drives You Nuts About Meetings or Committees?

• What Are the Things That We Must Do or Must Not Do?


Must Do Must NOT Do

Set Ground Rules

• Prioritize / Agree Upon Them

• Post At Each Meeting

• Everyone Has Responsibility to Keep People in Check

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• Look for Signs of Mutual

Accountability Breakdown

• Get Issues Out on the Table


Pay Attention to “They”

• Get Issues Out on the Table

• Before or After Meetings

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• Do Quick Hits First

• Easy Projects That Can Get Tangible

Results Fast


Pick Low Hanging Fruit

• Get a Few Easy Wins

• Nothing Breeds Performance Like

Performance

• Team Members Will Be Energized

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• Benchmark

• Other World-Class Organizations

• Learn best practices

• Put Learning on Your Agenda


Get New Information

• Put Learning on Your Agenda

• Learn About the Organization

• Collect and Present Data / Information

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• Have Fun

• Plan Social Hours

• Learn about your fellow team members

• Icebreakers


Build the Team

• Icebreakers

• Planned presentations by board members

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• Put On Regular Meeting Agendas

• Recognize Those on the Team or Others

That Went Above and Beyond

• Team Members Assigned to Give

Recognition


Exploit Positive Recognition

• Recognize Team Members Doing

Something Right

• Give Credit Where It Is Due

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• Clear Meeting Objectives

• Do NOT Get Wrapped Up In HOW

to Fix Something


Stay On Task

to Fix Something

• Have Smaller Groups Discuss and

Bring Back Options

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At End of Every Meeting:


Assign Tasks

Task/Activity Who By When

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Other Resources

1. Team Handbook

2. Memory Joggerby Goal QPC

3. The Leader’s Handbook

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3. The Leader’s Handbookby Peter Scholtes

4. Courses at UW by Mark Finster

Contact Info

@WalterNvrFalter

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5 -how to determine a lean project

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