Washington State Auditor’s Office Troy Kelley

I n d e p e n d e n c e • R e s p e c t • I n t e g r i t y

Introduction to Lean

Washington State Association

of Permit Technicians

April 27, 2015

Jennine Griffo, Lean Coordinator

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What is “Lean”? Lean concepts Waste is all around us Lean principles Defining the system The chocolate factory “Pull” vs. “Push” Lean methodology

Lean tools Lean leadership Lean culture Leadership video Tough HR questions caused by

Lean Local Government

Performance Center

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Today’s Workshop

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Current Understanding of Lean

Which describes you best?

1) I understand Lean and am ready to apply it to my job area.

2) I have a basic understanding of Lean principles and tools.

3) I heard about Lean, but have not had the chance to learn much.

4) If I hear the word Lean one more time, I’m going to scream.

5) Lean? Is that a personal weight reduction plan?

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What is Lean?

Gemba? Muda?

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What’s with all the sticky

notes?

What is Lean?

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What is Lean?

Lean is a set of principles and tools that help people learn-to-see and eliminate waste following a methodology that is customer focused and employee driven.

From a process perspective, Lean is….

Creating flow through the elimination of waste

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Why Lean?

Demand > Capacity x Resources

No Control Limited

Lean Focus

Confirms needed steps and eliminates unnecessary ones thereby creating more capacity.

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Lean makes Assumptions

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Lean methodology assumptions

Employees want to do a good job everyday

There is always room for improvement

We need to know what we do and how we do it

Our focus is on processes (and systems), not on people A bad system will beat a good person every time - Dr. Deming

Continuous improvement addresses issues people care about the most and changes the

culture to a team learning environment.

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Lean Culture builds continuous improvement culture by empowering workforce to

own the process and its effectiveness

Long Term Focus lives longer than the “flavor of the month”

keeps all eyes on what matters through metrics & visual systems

aligns with organizational strategic goals

Action Oriented emphasizes “doing” over “planning”

delivers fast-results to build momentum & learn from mistakes

focuses on immediate, real-time, small changes

What differentiates Lean?

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3 things make Lean promising for government agencies:

1. Focuses on operations to increase our capacity to provide value to those we serve.

2. Lean has a measurable impact on time, capacity and customer satisfaction. That is, it actually works.

3. Lean involves employees. Specifically, the employees who work within the system being improved. It cuts across silos and involves everyone because most employees can only see a part of the whole system.

Lean for Government

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Key Principles of Lean

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Specify Value Focused on the customer. Fundamental rethinking of value from the customers perspective. Clear view of the real value for them.

Value Stream Set of all specific actions required to bring a specific product, good or service, to the customer.

Pull Customer demand. Process allows the customer to pull the service or product vs. pushing it to them.

Process flow All steps create value and they flow without waste.

Continuous improvement

Perfection is never achieved, but rather continuously pursued.

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Employees

Process flow

Continuous Improvement

Value Stream

Specify value

Pull

Key Principles of Lean

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I enjoy working in a team!

Employee Empowerment

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Employees

Process flow

Continuous Improvement

Value Stream

Specify Value

Pull

Specify Value

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Specify Value What does the customer want and when?

The right service in the right amount to the right person at the right time

Meeting the expectations and requirements of those you serve

Get customer feedback

Meet expectations

Internal and external customers

Specify Value

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Employees

Process flow

Continuous Improvement

Value Stream

Specify Value

Pull

Value Stream

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Value Stream

Value Stream

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Value is… Defined by the Customer What they are willing to pay for (highest quality, at

the right time, at the right price)

A Value Stream is…. All the actions (both value added and non-value added)

required to deliver a product or service from initial request through to final delivery to the customer

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Essential Elements of the Value Stream

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The entire system is seen (SIPOC – Supplier, Input, Process, Output, Customer)

Who is the customer? How have they defined value? Is there a particular rate of demand?

Flow: Shown by the data gathered in a work block/data block Process Time (time spent working)

Wait Time (time spent waiting)

Cycle Time (total time for one unit to move through the process)

Examples of waste (errors & omissions, follow-ups, loopbacks, handoffs, system reliability, percent of steps that are non-value added)

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Lean focuses on VALUE as defined by the Customer

All process activities/tasks falls into one of three categories

Non Value Required Non Value Value Added

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How do we identify value?

Activities

Value Add

Flow

Non Value Add

Unnecessary

Eliminate

Non-Value Add

Required

Optimize

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Value-added activities are those which advance the work or increase the value of the process from the customer’s point of view.

Value added activities might include:

Update checklists Application processing Permit issuance

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Value-Added

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This work does not have direct value to advancing the work towards completion, but it must be done.

Non-value added activities might include:

Entering information into data bases

Moving information between locations

Code requirements

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Non-Value-Added but Necessary Work

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Non-Value-Added and Unnecessary

Unnecessary activities, are motions, behaviors or actions that are not required.

Waiting Sorting Inspecting Verifying Checking

Although these wastes may be non-value added and deemed unnecessary, they cannot simply be eliminated without understanding why they exist and what needs to be changed to ensure there are no negative impacts when they are eliminated.

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Defects Overproduction Waiting Non or under-utilized talent Transportation Inventory Motion Extra-processing

Eight Wastes

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Lean categorizes waste into eight areas

Any activity that consumes resources without creating value for the customer

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Defects Overproduction

Non or under-utilized talent Waiting

Data entry errors Pricing errors Missing information Lost records Equipment breakdowns

The Eight Wastes

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Defects

Too much information Duplicate data sources A graph or memo that is too

complicated Too many copies

The Eight Wastes

Overproduction

Non or under-utilized talent Waiting

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Data entry errors Pricing errors Missing information Lost records Equipment breakdowns

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The Eight Wastes

Overproduction

Too much information Duplicate data sources A graph or memo that is too

complicated Too many copies

Waiting Non or under-utilized talent

Computer systems Information Customer response Review or approval

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Data entry errors Pricing errors Missing information Lost records Equipment breakdowns

Defects

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Overproduction

Too much information Duplicate data sources A graph or memo that is too

complicated Too many copies

Waiting Non or under-utilized talent

Computer systems Information Customer response Review or approval

The Eight Wastes

Unbalanced workload Not considering suggestions for

improvement Watching machines work People not using their knowledge

and skills

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Data entry errors Pricing errors Missing information Lost records Equipment breakdowns

Defects

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Transportation

The Eight Wastes

Retrieving files Carrying documents Circulating documents for signatures Excessive email or electronic files

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Inventory

Motion Extra-processing

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Motion Extra-processing

The Eight Wastes

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Transportation

Retrieving files Carrying documents Circulating documents for signatures Excessive email or electronic files

Files waiting to be worked on Unused records in a database Excess supplies Emails waiting to be read

Inventory

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The Eight Wastes

Extra-processing

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Inventory Transportation

Motion

Searching for files Excess paperwork handling Extra steps

Retrieving files Carrying documents Circulating documents for signatures Excessive email or electronic files

Files waiting to be worked on Unused records in a database Excess supplies Emails waiting to be read

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Inventory

Files waiting to be worked on Unused records in a database Excess supplies Emails waiting to be read

Motion Extra-processing

Searching for files Excess paperwork handling Extra steps

Spreadsheets with the same information

Repeated manual entry of data Redundant reviews or approvals Email reminders

The Eight Wastes

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Retrieving files Carrying documents Circulating documents for signatures Excessive email or electronic files

Transportation

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Waste is all around us

Unnecessary approvals Bottlenecks Defects Incomplete work Shadow systems Searching Waiting Workarounds Interruptions Unsafe conditions Moving/transportation Converting formats Data discrepancies Manually checking

electronic data Missing data

Re-entering data Unnecessary data Ineffective meetings Lack of training Lack of useful feedback Poor project management Mishandled conflict Turnover Unclear roles Batching Frustration/stress Underutilized talent Rework No quality standards Poor communication Over processing Handoffs Scrap

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Things to Remember About Waste

Some waste can just be eliminated or reduced BUT…

Waste is often a symptom of poor Flow and/or Pull

Root cause is at the System and Process level

“The greatest waste is the waste we do not see”

-Shigeo Shingo

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Employees

Process flow

Continuous Improvement

Value Stream

Specify Value

Pull

Process Flow

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Output – What you make

Guidance Checklists Permits

Rework Scrap Waste

Process – What you do Methods

Tools Rules/Regulations

Staffing Environment

Materials

Process flow

Process Flow

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Employees

Process flow

Continuous Improvement

Value Stream

Specify Value

Pull

Pull

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Pull by the customer

Pull

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The Chocolate Factory

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Workers “pull” work when they are ready, it’s not “pushed” on them.

Workers can stop the production line to fix errors and eliminate waste.

No walls and doors between the kitchen, packing, and shipping.

Shipping would be working with packing to reduce the number of half eaten & unwrapped candies.

Supervisor in the workplace. Supervisor’s focus would be on teaching workers and helping

them figure out how to improve the flow and eliminate waste.

Visual management.

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What would be different in a Lean Chocolate Factory?

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Employees

Process flow

Continuous Improvement

Value Stream

Specify Value

Pull

Continuous Improvement

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Methodology for Lean

PDCA is best practice methodology for process improvement and problem solving

Despite having multiple steps and tools, PDCA does not need to be a lengthy process. It scales with the size of the problem and moves more quickly the more it is practiced.

PDCA is data-driven. Data helps illuminate root causes of waste, avoiding efforts that address symptoms and become wasteful in and of themselves.

You may not reach your target condition with your first effort, but PDCA is iterative and leads the practitioner down the path of continuous improvement.

PDCA (Plan-Do-Check-Act) Critical thinking elements

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Plan

Steps Tools

Define problem statement and target condition

Charter Document

Preliminary approach for the improvement project

Gemba observation

Measure Current state Value Stream Map

Analyze Data collection tools

Identify Root Cause Data analysis tools 5 Why’s Fishbone

Identify future state improvements

Countermeasures

PLAN changes that will deliver improvement

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Do

Steps Tools

Implement the future state improvement – a trial/test may be appropriate given the nature of the situation

Future State Value Stream Map

Monitor results and collect data

Data collection tools

DO changes that will deliver improvement

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Check

Steps Tools

Review and evaluate the result of the change

Gemba observation

Measure progress against target condition

Data analysis tools

Check for unseen consequences

Problem solving tools

CHECK to see if changes are delivering towards the target condition

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Act

Steps Tools

Roles and responsibilities defined

Organization likely has standardized tools used for these purposes (steps at left)

Training

Communication planning

Documentation

Lessons learned

ACT to standardize and prepare for the next PDCA iteration

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Lean Tools

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Lean Tool: Poka-Yoke (Error proofing)

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Lean Tool: 5S

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Before and After 5S

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Lean Tool: Visual Controls

Shared understanding of status Accountability Problem solving Employee satisfaction

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Visual Controls

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Example: Inventory Management

Green = inventory levels are

acceptable Yellow = inventory is getting

low (Re-order next cycle) Red = inventory is below

minimum set levels (Re-order now!)

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Lean Tool: Kanban

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Limit Work in Progress to only 2-3 items.

When you finish a project, pull another sticky note into your WIP.

You choose what to pull into WIP.

For urgent new projects, negotiate with your supervisor about what goes into WIP and what gets moved back to “Ready.”

Team members can and should collaborate.

Stand up meeting questions

What did you work on yesterday?

What are you planning to work on today?

Are there any roadblocks you need help removing?

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Lean Tool: Daily Stand-up Meeting or Huddle

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Lean Tool: Fishbone Diagram

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Lean Tool: 5 Whys

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Problem: Oil leaks from the hydraulic press 1. Why? Clogged filter

2. Why? Oil was dirty

3. Why? Metal filings got into oil

4. Why? Oil fill cap missing

5. Why? Misplaced & lost

Find the Root Cause

Solution! Oil filler cap attached to filler neck by a chain

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Lean Tool: Value Stream Mapping

Lean looks at Processes and the System

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Lean Tool: Value Stream Mapping

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Lean Tool: Value stream mapping

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Lean Tool: Kaizen

In Japanese, Kaizen means “Change for the good of all” 1

2

3

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Lean Tool: Kaizen

In Japanese, Kaizen means “Change for the good of all”

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5

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“Change for the good of all”

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They set the vision and objectives

They create a culture of learning

They provide support when mistakes happen

They support decisions made at the lowest possible level

Leadership is not only done by management!

Leadership: What is your role?

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Seeing the role of culture in Lean

Establishing the philosophy of lean is closely linked to culture. You can not sustainably implement lean systems if you are unwilling to do what is necessary to change the culture.

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Lean Leadership

It’s about a culture change

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Key to leadership is culture

leaders establish culture staff watches & reacts

Culture

what people do what gets rewarded how people treat each

other unconscious perceptions lessons learned and

passed onto others

Linking Leadership and Culture

Reference: Carlos Venegas

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No one right way to build a lean culture.

Mistakes are part of the journey. Inspire learning through coaching.

It takes leadership (tops down) and subject matter experts (bottoms up) working together.

Can’t policy and procedure your way to passion of purpose.

Doing the Work to Build a Lean Culture

I have no special talents. I am only passionately curious.

Albert Einstein

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So we’re talking about change management

What is change management? The tools, process and techniques to manage the

people side of change in order to achieve your required business results.

Projects with effective change management programs are nearly six times more likely to meet or exceed

their objectives than those with poor or unstructured change management programs.

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Where do we start?

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Model the way

Leaders must demonstrate the desire to continually improve their way of thinking • Desire to coach and willingness to be coached throughout the

thinking process

Primary objective is to improve the thinking capability of others • Leaders need to know how their employees understand a

situation and how they develop a solution

Having the right heart

Problems are good • To improve we are always checking for problems because

we want to find them Solutions come from others • Leaders do not need to know the solution – detrimental to

the development of the learner Process is not personal • Often, the problem is the process – not the people

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“Every time you solve a problem for an employee, you teach them dependency and fall on your sword as a leader.”

Set the course for the organization, and never waiver. Spend more time in the Gemba (Where the work gets done). Hold daily stand up & weekly reflection meetings. Allow for experimentation. Move from problem hiding to

problem solving. Ask questions, don’t try to answer them.

What happened? Why did it happen? What do you think we need to do to fix the problem? What can I do to eliminate barriers to implementing the fix?

Mentor your employees. 70

New Skills for Leaders and Managers

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Turn the ship around – Lessons in leadership

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“Every time you solve a problem for an employee, you teach them dependency and fall on your sword as a leader.”

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State Auditor’s Office Strategic Goals: Government that works better,

costs less, and earns greater public trust.

High audit quality and operational efficiency.

Highly skilled, engaged and dedicated employees.

How does Lean connect to the State Auditor’s Office?

Government that works for citizens.

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The Local Government Performance Center within the State Auditor’s Office offers tools and training to help local leaders who want their governments to work better, cost less, and earn greater public trust.

An online resource center with tools and examples

Training on how to improve government services

Customized on-site training sessions (on request and within available resources)

Our goal: better results for citizens and customers at lower cost to government and taxpayers

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Improved government performance: A shared goal

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Lean Academy

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Lean Results

Before

After

Whatcom County has the goal to cut the housing permit process from 73 days to 15 days.

Island County has the goal to cut the Shoreline Exemption permit processing time from 90 days to 45 days.

Clark County is trying to cut the Single Family Resident permit process from 23 days to 11 days.

Douglas County thinks it can cut the processing time on Commercial Building Permits from 36 days down to 20 days.

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Grant County

Project: Single Family Residence Building Permit

Sponsor: Director of Community Development

Training and 5 day kaizen in July 2014

All proposals implemented. Project established new office hours, standard operating procedures, modified metrics and successful request for additional planner.

After kaizen, County Commissioner did Gemba walk and increased budget to add staff member and developed new relationship with developers.

Lean Results

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Thurston County Project: Single Family Permit Review Sponsor: Director of Resource Stewardship

Training and 5 day kaizen January 2015

All proposals approved including reduced routing obtained through more electronic tools, standard procedures, and stricter customer requirements.

Kaizen identified improvements and provided Sponsor visibility to Lean skills in staff members.

Lean Results

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Check out the Local Government Performance Center online Lean resources: http://portal.sao.wa.gov/PerformanceCenter/

Check out the Governor’s Lean web page: http://www.accountability.wa.gov/leadership/lean/default.asp

Ask the Local Government Performance Center to host a Rapid Office Kaizen (ROK) training in your city/county.

Come up with a major process you want to improve, and ask the Local Government Performance Center staff if you can be part of the next Lean Academy.

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Possible next steps

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Right now:

Ask the person sitting next to you what they are going to do tomorrow.

Ask them why they chose to do that.

Ask them what barriers they think will get in the way.

Starting tomorrow:

Teach someone a concept from today’s class.

Implement/use a Lean tool or technique at work or at home.

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Homework – Practicing Lean Skills

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Questions? Thoughts?

Suggestions?

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Contacts

Sheri Sawyer Assistant Director, Local Government Performance

Center (360) 725-5552

Sheri.Sawyer@sao.wa.gov

Jennine Griffo Lean Coordinator (360) 725-5571

Jennine.Griffo@sao.wa.gov

Website: http://www.sao.wa.gov/local/Pages/LGPC.aspx