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?