applying lean/continuous improvement principles …applying lean/continuous improvement principles...
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Applying LEAN/Continuous
Improvement Principles to
Cash Management
Synthia Seefried, CTP
Senior Cash Manager
Kimberly-Clark Corporation
September 17, 2014
Agenda
History and Overview of LEAN
Examples of how time was reduced for Cash Management
History of “LEAN”
Principles began as early as the 1500s when Venetian Arsenal had
floating assembly lines for their boat production
1700s-1930: Concept of interchangeable parts, automatic
production of parts, Ford’s moving assembly line, mass production
1937: Toyota Motor Company: Just in Time delivery of parts
1960’s: Toyota creates a management system with a new approach
to problem solving, leadership, supplier collaboration, product and
process development and customer support
1987: “LEAN” proposed by MIT researcher as the label for the
combination of production, product development, supplier
collaboration, customer support, quality, and management methods
pioneered by Toyota
1980s-2000s: Many books written. Examples: “The Machine that
Changed the World,” “Lean Thinking,” “Learning to See” and “Lean
Solutions”
Excerpts from timeline on “Lean Enterprise Institute” website
What is Lean?
Lean focuses on eliminating waste in processes
Not only in Manufacturing settings!
Definitions of Waste:
Anything that the customer is not prepared to pay for
Anything that does not add value for the customer
Lean is about expanding capacity by reducing waste
and shortening cycle times
Removal of non-value added activity
Lean is about understanding what is
important to the customer
Lean is about respecting people
Value add vs. non-value added activity
Eliminate Waste (Muda)
8 Types of Waste Business Process Waste
Motion Walking, routing information, searching for files
Waiting Delays, authorizations, decisions, Computer system
issues
Conveyance Information and task hand-offs, manual workflows
Correction Defects, re-work, incomplete data
Processing Unnecessary steps, reports with too much data,
complicated approvals
Overproduction Unnecessary reports and information, back-ups in
multiple departments
Inventory A task waiting to be started (WIP), Piles of paper, e-
mails
Knowledge Same routine mistakes, not soliciting ideas from
those that do the work, non-value added activities
Improve
Flow!
8 types of Waste (Muda)
Motion
Waiting
Conveyance
Correction Over
processing
Over-production
Inventory
Knowledge
Value-adding: 5%
7
Waste: 95%
Waste Identification and Elimination
Key Learning Points of Waste
Anything that the customer is not willing to pay for
Typically less than 5% of processes to get a product to the customer
are value-added
Of the 8 types of process waste, over production is considered to be
the worst as it causes other types of waste
Focus on eliminating non-value added activities and limiting those
which are necessary through standardization
To Eliminate Waste - First Expose the Problems
Common Problem Solving Tools P
rob
lem
Co
mp
lex
ity/S
co
pe
Minutes, use Quick &
Easy Board
Hours, use SPS and/or
Process Map
Days-Weeks, use Kaizen
Event
Months, use A3 or
Lean/Six Sigma
(DMAIC)
Time to Resolve
Cash Management Example
Two issues to solve:
Needed to find more time to work on projects
Needed to issue commercial paper 1 hour earlier
Process Mapped the cash management day
When to use the Process Mapping tool:
This tool can be used at anytime to gain clarity and understanding of your current
condition
Generally best used when you want to move from your current state to an improved
future state
Prior Process
M-F: 8:15-11:00 then 1:00-2:00 (3 hours, 45 minutes)
Using 5 days per week (18 hrs, 45 minutes per week) and 52 weeks =
975 hours per year
Changes
• Start process upon arrival at 8 am
• Automate more of the prior day recon (reduce time by
15 min)
• Only obtain CP rates when needed
• Worked with bank to combine SCF report with
log-in for Disbursements (reduce log-in time)
• Eliminate cash report on Mon-Thurs (save 30 min per
day, 4 days per week)
• Eliminate “walk-around” time looking for releaser
(save 5 min = and stress reduction )
• Scheduled releasers reduces wait time
• Eliminate 9:30 bank file (cost savings) as not needed
• Prior to this process mapping time, also eliminated secondary review of cash position
New Process
M-Th: 8:00-10:00 then 12:30-1:00 (Reduced from 3.75 to 2.5 hours)
F: 8:00-10:00 then 12:30-1:30 (Reduced from 3.75 to 3 hours) Total: 13 hours per week (found 5.75 hours per week for other activities)
Total: 676 hours per year (300 hours per year saved!)
Typical non-value activities identified with Process
Mapping
From www.leankaizen.co.uk/process-mapping-lean-methodology.html
Plan, Do, Check, Adjust – Process for Continuous Improvement
PDCA
Plan Develop goal, means and
measures
Our hypothesis is…
Do Deploy and implement the
plan
Start with a pilot if possible
Check/ monitor the plan Confirm results
Are measures being met?
Adjust/Act If you succeeded, standardize
If not, start again or add to it
PDCA Process
Importance of making time to review processes!
Questions?
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