achieving operational excellence through lean...

Achieving Operational Excellence through Lean Transformation

Introduction to Lean October 29, 2014

PricewaterhouseCoopers LLP

Introduction to Lean

PPX Learning Events October 29, 2014

Haneef Chagani Partner, National Lean Practice Leader

PricewaterhouseCoopers LLP 250 Howe Street, Suite 700

Vancouver BC V6C 3S7

[email protected] 604-806-7071

http://www.pwc.com/ca

2


Overview of Presentation

• What is Lean?

• Why are organizations implementing Lean?

• Getting Started with Lean

• Value Stream Mapping and Training

• Lean Management System – Building a Lean Culture

• Project Examples

3


PwC

What is Lean?

• A business philosophy based on the fundamental goal of continuously minimizing waste and maximizing flow.

• The term “lean” refers to a basic absence of waste.

4



History of Lean

Early 1900s…>>…..WWII…>>….1970’s………1980’s…………..1990’s….………2000……………..2010

1937 Toyota Motor Co

1950’s…Deming in Japan

Late 40’s – early 60’s – TPS develops…driven by need after WWII. Earliest use of tools such as JIT, Kanban, Andon, visual controls.

1980s – 1990s, “Lean Thinking” by James P. Womack, Daniel T. Jones

1980’s…

”new domestics”

…bring Lean culture

5


PwC

Lean Processes Deliver to Customers

• Exactly what they need

• When they need it

• In the quantity they need

• In the right sequence

• Without defects

• At the lowest possible cost

6



A Shift in Mindset

7

Current Thinking Lean Thinking

Overproduction

Transportation

Over-processing

Inventories

Motion

Under-utilized resources

Rework

Waiting

Overproduction

Transportation

Over-processing

Inventories

Motion


Rework

Waiting

Overproduction

Transportation

Over-processing

Inventories

Motion


Rework

Waiting

7+1

Wastes


PwC

Philosophy

• Waste exists everywhere in the organization

• Lean systems focus on identification and elimination of waste

• All employees must be trained to identify and eliminate waste from their work – this will ensure successful implementation of Lean

8

To have value, we must reduce waste!

The goal is to eliminate waste

permanently



Five Guiding Principles of Lean

9

• Specify value from the standpoint of the end customer (1) Focus on Customer Value

• Identify all the steps in the value stream, eliminating those that do not create value

(2) Define Value Streams

• Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer

(3) Create a Continuous Flow

• As flow is introduced, let customers pull value from the next upstream activity

(4) Customers Pull the work

• Begin the process again to create more value while further reducing waste

(5) Strive for Perfection



The Value to Waste Ratio

Only 25% of traditional work activity is truly adding value

10

Waste

Incidental Work

Value Added Work


PwC

Key issues in the public and private sector organizations

• Cost reduction

• Increasing regulations and risk

• Greater transparency on expenditure and outcomes

• Increasing demand for services

• Employees at all levels need to be engaged in service delivery improvement

• Strategic culture change – need for culture of continuous excellence

• Limited funding/budgetary constraints

• Demographic changes – can’t easily replace people leaving

• Need for operational excellence/efficiency

• Focus on core and devolve non-core services

• Need to work across organizational boundaries to improve services and find efficiencies

11



How Lean addresses these issues

• Removes wasteful work from processes

• Allows an organization to impact culture – create a culture of continuous improvement and customer value

• Better utilize resources

• Enhances transparency and measures results

• Allows new capacity to be created

• Encourages senior managers to focus more on how work is getting done

12

Lean creates and engaged workforce, drives simplification and focuses on

providing value to customers



Lean Drives Results Lean has a 50 year track record supporting organizational performance in manufacturing and service industries


13

• Reduce defects by 60%

• Improve throughput by 200%

• Improve productivity by 50%

• Reduce total cycle time by 50%

• Reduce cost by 50%

• Reduce floor space by 50%

• Reduce inventory by 90%

• Reduce lead time by 75%

Lean Performance Standards:

• Liability cost savings of over $1M annually, which have been redirected to provide services to the public

• 50%-95% reduction to process cycle times

• Millions of dollars saved in procurement and through improved inventory management

• Reduced number of process hand-offs by more than 50% from current 10-12 touch points to 5

• Dramatically improved customer contact centre response time

• Over 40% of senior leaders time is spent on value activities including coaching, driving performance and problem solving

Examples in the context of Public Sector:


Lean Thinking Behaviours

14

Traditional Management Lean Management

Functional Focus Outcome Focus

Managers Directs Managers Teach/Enable

Blame People Blame the Process

Volume Lowers Cost Waste Increases Cost

Reactive Quality Proactive Quality

Internal Competition Internal Cooperation

Employee as a Cost Employee as an Asset

Drive for Results Process Improvement

Undetectable Process Flow Visual Workplace

Independent MBO’s Linked Goals

Functional Silos Value Streams


PwC

Getting Started with Lean


15


Deployment Philosophy and Roadmap A “See, Learn, Do” approach – rapidly develops internal capability and capacity to sustain Lean

16

Benefits Management

Program Management

Change Management

VSM & Kaizen Events

Lean Management System

Training • Train senior

management, operational managers and frontline staff.

• Understand current situation, strategy goals and timeline.

• Identify key service areas for initial deployment of Lean philosophy and techniques for continuousl improvement.

Dr

ivin

g C

ha

ng

e

De

liv

er

ing

Ch

an

ge

Strategy & Assess

Mobilize

• Refine Lean deployment approach and training.

• Formalize knowledge transfer.

• Implement Lean Management System.

• Select priority customer-facing Value Streams,.

• Complete first set of Value Stream improvement events.

• Deliver and measure benefits.

• Evaluate the overall Lean deployment approach.

Initiate Integrate Sustain

• Continue implementation of Lean Management System and in the creation of Lean culture of continuously improving service and operating efficiency.

• Establish systems and infrastructure to embed the change.

PwC

Value Stream Mapping and Training


17


Daily View of Value Stream Mapping Event

Day 4 •Finalize Presentation. •Dry Run of Presentation.

•Team Presentation to Sponsors and Executives.

Day 3 •Validate Future State Map. •Implementation Plan.

•Benefits Capture & KPI’s. •Presentation Development.

Day 1 •Value Stream Training. •Waste Identification.

•Current State Mapping. •Issues Identification.

Day 2 •Root Cause Analysis. •Brain Storm Solutions. •Identify Improvements. •Future State Mapping.

Day 1 Deliverables

•Deliver Lean/VSM Training

•Current State Map

•Key Issues Documentation

Day 2 Deliverables

•Data Analysis and Review

•Identification of Improvement Opportunities and Solutions

Day 3 Deliverables

•Future State Process Map

•Implementation Plan

•KPIs / Metrics Plan

Day 4 Deliverables

•Communication Plan

•Close Out Presentation

18


PwC

Lean Training – everyone gets trained

Introductory Level

• Introduction to Lean for Executives (2 days)

• Introduction to Lean for Managers and Supervisors (1 day)

• Introduction to Lean for Staff (1 day)

Advanced Training and Certification

• Lean Leader Training (3 days)

• Lean Six Sigma Green Belt (5 days)

• Lean Six Sigma Black Belt (20 days)

• Lean Six Sigma Master Black Belt (10 days)

19

Develop a culture of “Lean Thinking” through training,

coaching and “doing” Lean


PwC

Lean Management System – Building a Lean Culture


20


Lean Culture

Philosophy and values of the Toyota Production System (TPS):

Continuous improvement

• Long-term vision; go to the source of the issue or problem

Respect for people

• Respect others and build mutual trust; maximize individual and team performance

Be close to the workplace

• Leaders should have an intimate knowledge of how work is getting done

21



Building a Lean Culture – Lean Management System

Approach to:

• Optimize what managers and teams do, how they do it, and the tools they use

• Assist organisations to act and behave differently from the past and be equipped with the internal management capabilities to channel resources effectively and efficiently towards accomplishing the vision

• Support, encourage and identify problems (and opportunities)

• Execute and sustain continuous improvement

22



The management system elements are introduced incrementally through structured weekly learning cycles

Coaching Training

Design

Construct

Implement

Review

Learning Cycle Week

1 2 3 4 5 6 7 8

Information Centres

Performance Reviews

5S & Visual Management

Problem Solving

Standards

Process Confirmation

Coaching & Capability

Routines & Practices

Vision

Celebrating Success

23

PwC

Thank you for your participation! Questions?


24

achieving operational excellence through lean...

Documents