Implementing Innovative Process Improvement & Lean
Practices
January 23, 2014
Agenda
1. Introduction: Challenges facing the Public Sector
2. Laying the groundwork for a successful implementation
3. Developing well defined goals & objectives
4. Team Selection
5. Getting organizational buy-in
1. Introduction: Challenges facing the Public Sector
Public organizations face at least five key challenges:
1. Creating a truly transformational government 2. Meeting heightened constituent expectations3. Managing workforce transitions4. Minimizing the risks of implementing new technologies, and,5. Monetary issues, which are much more of operating realities
that color all decisions, are the fifth challenge.
Lean manufacturing processes have emerged as a means to help break the politicized cycle and short term pressures
2. Laying the Groundwork
LEAN THINKINGThe relentless effort to systematically reduce waste while improving the flow of value to the customer”
•Focused on eliminating waste•Provides principles, for improving work•Provides levers to drive system improvements
2. Laying the Groundwork - The Six Overarching Principles & Practices:
Partnership between supplier and producer• Fewer, better managed
suppliers• Quality at the source• Shared destiny
relationships• Supplier development
LEAN WORK METHODS Tactical shop-floor policies used to implement Lean
• Service oriented production• Standard work• Visual control• Good housekeeping/5S • Set-up time reduction• Total Preventive Maintenance
• Education and development
• Flat organizations• Decentralized
management
ORGANIZATION & CULTUREProgressive employee relations and change leadership
• Workplace safety • Multi-skilled, flexible
workforce• Worker job security• Improvement incentives
• U-shaped lines• Autonomation• Line stops and andons• Error proofing
PULL Everything produced at the rate of production of the final
product -- “pull” production control• Just-In-Time production and delivery • Linked production at Takt time• Kanbans• Level scheduling• Machines available on demand
PURSUING PERFECTIONContinuous improvement attitude and empowerment
• Kaizen events and continuous improvement • Self-inspected quality, not inspected in quality • Process ownership and responsibility• Advanced quality concepts and measures
– Hardware Variability Control (HVC)– Statistical Process Control (SPC)
SOURCING & SUPPLIER INTEGRATION
FLOW Maximizing value by producing only what is desired in the
shortest time possible with the least resources• Single piece flow• Physically and visually linked operations• Consolidated operations• Simplified and standardized processes
Some lean operations principles and tools may not apply, but the methodology will identify and help you to eliminate waste, thereby making your value streams leaner
2. Laying the Groundwork
However, adopting Lean means getting past some of the misunderstandings and misperceptions surrounding Lean:• “Another management fad that will disappear within a year”• “Cost cutting”• “Headcount reduction” • “Won’t work in my area” e.g. Engineering department
2. Laying the Groundwork
The Benefits of Lean• The percentage of patients being met within the target of 62 days rose from
around 40% to 75-80%.• A reduction in the average time to first appointment from 23 to 12 days.• The average time taken for processing a planning application was reduced from 5
days to 2 days.• A reduction in flow time of patients of 48%.• More calls answered at first attempt (30% - 85%)• More queries answered without the need for passing the customer to another
department• Cutting end-to-end time for adaptations to housing for disabled people from over
200 days to 12 days.• Reducing payroll errors from 75% to 2%.• Reducing backlogs in lost and found departments by 80%.• Reducing the time taken in report preparation in the Justice system from 77 to 6
days.Source: International Public Sector Research & Case studies
3. Developing well-defined Goals & Objectives: Setting the Stage
1. What is the overall business challenge? What problems does the business need to resolve?
2. What is the local problem you’re trying to resolve?
3. How will you measure this problem?
4. Did the solution work or not?
3. Developing Well-defined Goals & Objectives - Current State:
• Managers count the “value added” by an organization
• “Value added is the cost of inputs from outside the organization subtracted from the selling price (or fees, tax collected, costs recovered) of an organization’s products and services.
• But much of the “value” being added is actually waste: Rework, excess handling, excess processing, wait time, inventories (to be picked up, put down and stored), etc.
3. Developing Well-defined Goals & Objectives – Future State:• We want to increase value and minimize waste, so what can
managers and finance people do to count value and waste separately and more usefully?
• For a start, perhaps we can all start by talking about “value created”– the useful activities in organizations from the standpoint of their customers- instead of “value added” – which is the cost (including waste) plus recoveries and margins added by the provider.
• What managers need and want is a way to think about the future so a business can be managed & improved.
• This can only be done by creating, sustaining and improving better processes that engage the people actually creating value
Starts with an assessment of current performance – where are we now?
Seven Deadly WastesTIMWOOD
Transportation
Inventory
Motion
Waiting
Over-Production
Over-Processing
Defects
e.g. Fire Inspection Services“Violation Orders”
Searching for information
Defects/Rework
Approval Wait Time
Meetings & Conference
Calls
Value-Added ~35%
Other
3. Developing Well-defined Goals & Objectives - Current State:
3. Developing Well-defined Goals & Objectives: Current State
Mechanic:
Electrician:
Operator:
• Client sets the expectation on how much of the gap they want to close
• Bench mark against “best in class”
KCB’s experience is that clients can recover a minimum of 50% of theNon Value Add activity
Opportunity
Opportunity
12
Facilities Management Services e.g.
3. Developing Well-defined Goals & Objectives: Current State Supervisory Study - Facilities Management ServicesTypical “Day-in-the-Life
13
Intra-site FlowInformation Flow
Inter-site FlowDenotes site changeDenotes building change
Intra-site FlowInformation Flow
Inter-site FlowIntra-site FlowInformation Flow
Inter-site FlowDenotes site changeDenotes building change
Sample Part: XXX
Transactional StatisticsTotal Systems Employed: 19Total Info Transactions: 399- Manual Trans: 277- Systems-based Trans: 122
Information Pathway Distance- Inter-site: 4,105 miles- Intra-site: 44,960 feet- Time Variation: 3 hours
DM
Program Off ice
Eng-Design
Drafter-CentaurDrafter-Booster
Eng-StructuresEng-Av ionics
Eng-Fluids
Eng-Checking
Eng-Mission Int
Eng-Sof tware
Supplier Data
Eng-Chief
Conf iguration Management
Admin
Saf ety
Eng-Sy stems
Model Control
ReleaseMission Success
Order Control
Quality
Contracts
Subcontract-AdminMaterial
Planning0
Eng-Production
Process Planning
Eng-QA
Asset SpecialistsPrint Crib
Machinist-Tool
Eng-Mechanical
Eng-Test
Production Planning
Product AssuranceReproduction
Repro-Data Entry
Repro-Lead
Reproduction-Photographer
Repro-Copy
Repro-Distribution
Receiv ing
Receiv ing-Asset Specialist
Receiv ing-Data
Receiv ingQuality Inspection
Truck Driv er
Mission Integration
Cape Receiv ing
Eutelsat
Purchasing-Planning
Buy er-Labarge Eng-Labarge
CSC HarlingenCODS EDE
ProE
TRMS
CODSProE
CODS
CODSCVSPADR
CODSProE
ProEPADR
TSOCODSPADR
Support
Support
Support
MACPAC
MPPS
Support
CODS
MACPAC
CODS
MPPS
PADRCODS
ELC
MPPS
CVS
FMP
MACPAC
PIRSPODS
KSAEMAS
Ref lections
CADS
CADS
CADS
Support
Support
Support
Support
MACPAC
Liv eLink
TSO ELC
DM
Program Off ice
Eng-Design
Drafter-CentaurDrafter-Booster
Eng-StructuresEng-Av ionics
Eng-Fluids
Eng-Checking
Eng-Mission Int
Eng-Sof tware
Supplier Data
Eng-Chief
Conf iguration Management
Admin
Saf ety
Eng-Sy stems
Model Control
ReleaseMission Success
Order Control
Quality
Contracts
Subcontract-AdminMaterial
Planning0
Eng-Production
Process Planning
Eng-QA
Asset SpecialistsPrint Crib
Machinist-Tool
Eng-Mechanical
Eng-Test
Production Planning
Product AssuranceReproduction
Repro-Data Entry
Repro-Lead
Reproduction-Photographer
Repro-Copy
Repro-Distribution
Receiv ing
Receiv ing-Asset Specialist
Receiv ing-Data
Receiv ingQuality Inspection
Truck Driv er
Mission Integration
Cape Receiv ing
Eutelsat
Purchasing-Planning
Buy er-Labarge Eng-Labarge
CSC HarlingenCODS EDE
ProE
TRMS
CODSProE
CODS
CODSCVSPADR
CODSProE
ProEPADR
TSOCODSPADR
Support
Support
Support
MACPAC
MPPS
Support
CODS
MACPAC
CODS
MPPS
PADRCODS
ELC
MPPS
CVS
FMP
MACPAC
PIRSPODS
KSAEMAS
Ref lections
CADS
CADS
CADS
Support
Support
Support
Support
MACPAC
Liv eLink
TSO ELC
DM
Program Off ice
Eng-Design
Drafter-CentaurDrafter-Booster
Eng-StructuresEng-Av ionics
Eng-Fluids
Eng-Checking
Eng-Mission Int
Eng-Sof tware
Supplier Data
Eng-Chief
Conf iguration Management
Admin
Saf ety
Eng-Sy stems
Model Control
ReleaseMission Success
Order Control
Quality
Contracts
Subcontract-AdminMaterial
Planning0
Eng-Production
Process Planning
Eng-QA
Asset SpecialistsPrint Crib
Machinist-Tool
Eng-Mechanical
Eng-Test
Production Planning
Product AssuranceReproduction
Repro-Data Entry
Repro-Lead
Reproduction-Photographer
Repro-Copy
Repro-Distribution
Receiv ing
Receiv ing-Asset Specialist
Receiv ing-Data
Receiv ingQuality Inspection
Truck Driv er
Mission Integration
Cape Receiv ing
Eutelsat
Purchasing-Planning
Buy er-Labarge Eng-Labarge
CSC HarlingenCODS EDE
ProE
TRMS
CODSProE
CODS
CODSCVSPADR
CODSProE
ProEPADR
TSOCODSPADR
Support
Support
Support
MACPAC
MPPS
Support
CODS
MACPAC
CODS
MPPS
PADRCODS
ELC
MPPS
CVS
FMP
MACPAC
PIRSPODS
KSAEMAS
Ref lections
CADS
CADS
CADS
Support
Support
Support
Support
MACPAC
Liv eLink
TSO ELC
DM
Program Off ice
Eng-Design
Drafter-CentaurDrafter-Booster
Eng-StructuresEng-Av ionics
Eng-Fluids
Eng-Checking
Eng-Mission Int
Eng-Sof tware
Supplier Data
Eng-Chief
Conf iguration Management
Admin
Saf ety
Eng-Sy stems
Model Control
ReleaseMission Success
Order Control
Quality
Contracts
Subcontract-AdminMaterial
Planning0
Eng-Production
Process Planning
Eng-QA
Asset SpecialistsPrint Crib
Machinist-Tool
Eng-Mechanical
Eng-Test
Production Planning
Product AssuranceReproduction
Repro-Data Entry
Repro-Lead
Reproduction-Photographer
Repro-Copy
Repro-Distribution
Receiv ing
Receiv ing-Asset Specialist
Receiv ing-Data
Receiv ingQuality Inspection
Truck Driv er
Mission Integration
Cape Receiv ing
Eutelsat
Purchasing-Planning
Buy er-Labarge Eng-Labarge
CSC HarlingenCODS EDE
ProE
TRMS
CODSProE
CODS
CODSCVSPADR
CODSProE
ProEPADR
TSOCODSPADR
Support
Support
Support
MACPAC
MPPS
Support
CODS
MACPAC
CODS
MPPS
PADRCODS
ELC
MPPS
CVS
FMP
MACPAC
PIRSPODS
KSAEMAS
Ref lections
CADS
CADS
CADS
Support
Support
Support
Support
MACPAC
Liv eLink
TSO ELC
Findings• Sign-off processes lack system
efficiency and result in manual reproduction effort (44 of the 56 change order steps are manually completed)
• Non-interfaced systems require re-keying of data
• Multiple systems generate additional work to maintain and update data (EBOM vs. MBOM configuration)
• Local application used to track and manage data flowing through the release and configuration management areas duplicates work in CODS (File Maker Pro)
Information space maps reveal complexity added to the value stream through inefficient system and data flows
3. Developing Well-defined Goals & Objectives: Current State
3. Developing Well-defined Goals & Objectives
So what types of objectives should be developed that can help managers envision and and implement better processes that create more value and less waste?
• Physical measures of the current state to spur improvement
• Changes in these physical measures in the future state – determined in the C step PDCA – to confirm improvement?
3. Developing Well-defined Goals & Objectives
Lean goals & measures need to reinforce the new configuration of work and encourage the minimization of “distance, friction, space and time”.
Sample Lean Metrics• Cycle times• Customer service levels (e.g., late orders, delivery performance)• Total product throughput time• Resources consumed per unit of output• Resources employed per unit of output• Inventory / working capital turns• Return on assets• Hand-offs in critical processes• Distance parts/materials, travel• % of workforce cross-trained
4. Team Selection• Cross-functional and include customers and suppliers
– People who have a “stake” in the value stream• Customers: e.g. Hospital Patients, Building owners (Fire Prevention Services)• Suppliers e.g. Facilities maintenance, Procurement
• People who actually “do” the work• Managers who are prepared to go the gemba and “roll up
their sleeves” (you may have to “help” prepare them)• Ideally, people who are familiar with the PDCA cycle
– Plan, Do, Check, Act (See Appendix for explanation of the PDCA cycle)• People who’ve had some exposure and training on the
application Lean tools & techniques, in particular– Value stream mapping– Observations (Day-in-life)
5. Organizational Buy-in: The Roots of Engagement
So what is it that prevents an organization from implementing its Lean Strategy?
In our experience responses can generally be categorized into one of the two following gaps:
1. The first gap occurs when an organization tries to execute its lean strategy despite its people, rather than through them.
2. The second gap is formed by the organization’s failure to create a process that clearly outlines how the strategy will be executed, and most important, connects the people to each other in that execution.
5. Organizational Buy-in: The Engaged Difference
So:
1. How do we convince an entire organization to think and act differently?
2. How do we encourage those discretionary efforts so critical to success?
3. How do we get the full workforce to become engaged?
5. Organizational Buy-in: The Engaged Difference
1. PEOPLE WANT TO BE PART OF SOMETHING BIG.
2. PEOPLE WANT TO FEEL A SENSE OF BELONGING
3. PEOPLE WANT TO GO ON A MEANINGFUL JOURNEY
4. PEOPLE WANT TO KNOW THAT THEIR CONTRIBUTIONS MAKE A SIGINIFICANT IMPACT OR DIFFERENCE
5. Organizational Buy-in: An Engagement Technique
“Oranging” it: An innovative Problem Solving and Value Stream Improvement Technique
Michael Rosenberg – Author of “The Flexible Thinker”
