lean office overview 2015

Lean Office Overview

Improving Workflow and Efficiency in Administrative Processes

Quantum Associates, Inc 2015

What is Lean?

• Lean focuses on eliminating waste inprocesses

• Lean is not about eliminating people

• Lean is about expanding capacity by reducingcosts and shortening cycle times

• Lean is about understanding what isimportant to the internal or external customer

2Quantum Associates, Inc 2015

Thinking Lean

• Specify value

– can only be defined by the ultimate customer

• Identify the value stream

– exposes the enormous amounts of waste

• Create flow– reduce batch size and WIP

• Let the customer pull product through the value stream

– make only what the customer has ordered

• Seek perfection

– continuously improve quality and eliminate waste

From Lean Thinking by Womack and Jones3Quantum Associates, Inc 2015

“In America today we have good peopleworking in poor processes.What we wantis good people working in great processes”

Michael Hammer

Thinking Lean


Benefits

• Lean provides tangible benefits

• Reduces costs not just selling price– Reduces delivery time, cycle time, set-up time

– Eliminates waste

– Seeks continuous improvement

• Improves quality

• Improves customer ratings and perceptions

• Increases overall customer satisfaction

• Improves employee involvement, morale, and companyculture

• Helps “transform” organizations


Definitions

• Value - A capability provided to a customer atthe right time at an appropriate price, asdefined in each case by the customer.Features of the product or service,availability, cost and performance aredimensions of value.

• Waste - Any activity that consumesresources but creates no value


Three Types of Office Activities

• Value-added activities

• Business non-value-addedactivities

• Non-value added activities


Value-added Activities

• Those steps the customer is willing to pay for

• To qualify as value-added an activity must meetthe following criteria:

– It changes the form, feature, or function thatthe customer desires

– It must be “done right the first time”

– The customer is willing to pay for it

“It is the customer who determines what a business is.What thecustomer thinks he is buying, what he considers ‘value,’ is decisive—itdetermines what a business is, what it produces and whether it willprosper.” –Peter Drucker


Business Non-Value-Added Activities

• Activities the customer isn’t willing to payfor but must be done to comply withregulations, organizational policies, and soon

• You must periodically examine theseactivities to make sure they are necessary, ifnot eliminate them


Non-value-added Activities

• Those activities the customer is not willingto pay for and can be avoided

• Your goal should be to eliminate theseactivities because they are WASTE


Types of Waste

• Overproduction

• Excess inventory

• Defects

• Non-value added processing

• Waiting

• Excess motion

• Transportation

• Underutilization of people


Eight Service Industry Wastes

1. Errors in documents

2. Transport of documents

3. Doing unnecessary work not requested

4. Waiting for the next process step

5. Process of getting approvals

6. Unnecessary motions

7. Backlog in work queues

8. People not working to their full potential


Examples of Office Process Waste

•Too many signature levels•Unclear job descriptions• Obsolete databases/files/folders• Purchase Orders not matching quotation• Errors – typo’s, misspelling, wrong data• Waiting – for information, at meetings, etc.• Poor office layout• Unnecessary E-mails


The Eight Deadly Wastes

• Waiting Waste– Waiting for anything—people paper, machines or information

– Waiting means idle time, and that cause the flow of work tostop

– Documents waiting in your in-box or emails waiting to beanswered, documents waiting for approval

To Eliminate this Type of Waste• Review and standardize required signatures to eliminate unnecessaryones

• Cross train employees to allow work to continue when someone is out• Balance the workload throughout the day to make optimum use ofpeople

• Make sure equipment and supplies are available



• Transportation Waste– Transporting something farther than necessary

– Temporarily filing, stocking, stacking, or moving materials,people, information or paper

– Transportation waste can occur where work stations are notproperly laid out

To Eliminate this Type of Waste• Make the distance over which paper, information, etc is moved as shortas possible

• Eliminate any temporary storage or stocking locations



• Over-Processing Waste– Unnecessary effort which adds no value to a product or

service

– Redundant activities such as checking someone else’s work

– Obtaining multiple signatures or excessive reviews

To Eliminate this Type of Waste• Review the value-added steps in each process, and streamline oreliminate steps whenever possible

• Review all signature requirements and eliminate signatures wheneverpossible



• Inventory Waste– Any supply of materials in excess of what is required to deliver

services in a Just-In-Time Manner

– Unneeded files, extra supplies, and unnecessary copies

– This waste is also related to time. Time is a valuablecommodity in the office environment, and a work unit sitting onsomeone’s desk is waste

To Eliminate this Type of Waste• Produce only enough to satisfy the requirements of your downstreamcustomer

• Standardize work locations and the number of units per location• Make sure that work arrives at the downstream process when it isneeded and doesn’t sit there



• Motion Waste– All unnecessary work or people movement

– Ineffective job processes and layout contribute to morewalking, reaching or bending than necessary

To Eliminate this Type of Waste• Standardize folders, drawers, and cabinets throughout the area—usecolor codes

• Arrange your files (paper and electronic) in such a way to easilyreference them

• Arrange work areas of office equipment in central locations—considerpurchasing additional equipment to eliminate multiple trips



• Defect Waste– Waste as a result of defective work

– Rework—doing something over

– Incorrect information on a form or missed deadlines

To Eliminate this Type of Waste• Establish standardized work procedures and office forms• Create and post visual job aids



• Skills Underutilization

– Is a result of not placing people where they can(and will) use their knowledge, skills, and abilitiesto the fullest

To Eliminate this Type of Waste• Involve people in the lean transformation• Empower your staff to make improvements• Listen to new ideas for improvement and implement them when

possible


Lean vs. Traditional

• Major reduction in sales-order cycle time by

59 percent (from 23 hours to 9 hours)

• Engineering change-order cycle time decreased by91 percent (from two hours to ten minutes)

• Response time to customer’s quote requests reducedby 83 percent (from 66 hours to 11 hours)

• Errors by company employees were reduced by 69

percent(Tonya, 2004)


Lean Enterprise vs. Traditional

• Half the hours of engineering effort

• Half the product development time

• Half the investment in machinery, tools andequipment

• Half the hours of human effort

• Half the defects in the finished product or service

• Half the space for the same output

• A tenth or less of in-process inventoriesSource: The Machine that Changed the World, Womack, Jones, and Roos, 1990.


Barriers to Lean

• Implementing Lean Can Be Difficult Because it isCounterintuitive from a Traditional Paradigm:– Providing documents or information at the rate demanded by the

customer instead of batching documents

– Cross training instead of putting activities on hold until the one personwho knows how to perform the activity can get to it

– Using standards to continuously improve.

• There is no step-by-step cook book– There are some basic steps but the how-to varies from organization

to organization

– Requires an assessment of the company in order to map out thestrategy

• Company culture plays a big part in the how-to


Implementing Lean

• Gain top Management “Buy In” and Support

• Perform overall company assessment tied to company strategic,operational, and marketing plans

• Develop strategic lean deployment plan

• Integrate customized training with lean to improve specific skill sets,leverage training resources

• Team Building, Communications, Problem Solving, ChangeManagement, Lean Manufacturing Tools

• Conduct “Kaizen blitz” high impact events

• 5S, Work Cell, Set-Up Reductions, Inventory Reductions, WorkStandardization

• Use an enterprise wide approach to help “Transform” your culture andthe way you do business.


Progress Toward Lean

• Smaller batch sizes

• Increased capacity / throughput

• More available floor space

• Improved workplace organization

• Improved quality : reduced defects / re-work

• Reduced lead times

• Improved participation & morale


Some Lean Concepts

• Kaizen• Pull• Lean Office Suggestions


What is Kaizen?

• Kaizen (Ky’zen)

• “Kai” means “change”

• “zen” means “good (for the better)”

• Gradual, orderly, and continuousimprovement

• Ongoing improvement involving everyone


How to Kaizen

• Identify the customer

• PDCA Cycle– Plan – identify what to change and how to do it

• Current state

• Future state

• Implementation plan

– Do – execute the improvement

– Check – ensure the improvement works

– Adjust – future and ongoing improvements

– Repeat


Kaizen—Identify the Customer

• Value added is always determined from thecustomer’s perspective.

• Who is the customer?

• Every process should be focused on adding valueto the customer.

• Anything that does not add value is waste.

• Some non-valued added activity is necessary waste(“NVA-R”)

– Regulatory

– Legal


Kaizen—Identify the Current State

• Crucial first step in process improvement

• Deep understanding of the existing processes anddependencies

• Identify all the activities currently involved indeveloping a new product

• Observe the process first hand

• Identify Value Added (VA), Non-Value AddedRequired (NVA-R), and Non-Value Added (NVA)

• Generally creates more questions than answers


Kaizen—Brainstorm and Analyze

• Kaizen team brainstorming to develop new process

• Post improvement ideas on map or by category– Workflow

– Technology

– People / Organization

– Procedures

• Develop detailed future state map– New workflow

– Value Add and Non-Value Add

– Cycle times

– Identify Kaizen “bursts” (immediate radical change)


Kaizen—Implementation Plan

• Think global / systems optimization

• Maximum impact to process

• Speed of implementation – create smallvictories

• Cost-benefit analysis


Kaizen—Execute

• Develop a concise, achievable milestone plan

• Communicate the plan to everyone

– Suppliers

– Team members

– Customers

• Track activities in public

• Celebrate small victories and publicly analyzefailures


Kaizen—Check and Sustain

• Meet regularly (weekly?) to review status ofopen implementation items

• Re-evaluate Future State regularly(quarterly?) for additional improvement

• Track results on a public Kaizen Board


Kaizen Blitz

• Total focus on a defined process to createradical improvement in a short period of time

• Dramatic improvements in productivity,quality, delivery, lead-time, set-up time, spaceutilization, work in process, workplaceorganization

• Typically five days (one week) long


Kaizen Blitz - Agenda

• Day 1: Setting the scene

– Meet the team, training

• Day 2: Observe the current process

– Flowchart, identify waste, identify root causes

• Day 3: Develop the future state process

– Brainstorm and flowchart (typically the longest day!)

• Day 4: Implement the new process

– Plan, communicate, implement, modify

• Day 5: Report and analyze

– Performance vs. expectations


10/15% 10/20% 5% 60/75%

90%5% 5%

Adm/clerical-filing-typing-mailing-gathering data

General phoneInquiries from

members

Fill in forOther staff

Loan Processing

Phone inquiriesLoans only

Fill in forOther staff

Loan Processing

Example – Financial Institution

Time spent by Loan Processor – Old Process

New Lean Process after Kaizen Event

NVA

VA

BNVA


Roadblocks To Kaizen

• Too busy to study it

• A good idea but the timing is premature

• Not in the budget

• Theory is different from practice

• Isn’t there something else for you to do?

• Doesn’t match corporate policy

• Not our business – let someone else analyze it

• It’s not improvement – it’s common sense

• I know the result even if we don’t do it

• Fear of accountability

• Isn’t there an even better way?


Why Pull?

Lean is really about minimizing waste

• Which is about only creating work (orwork units) required by thedownstream process (or customer)

• Which is about seamless continuousflow


Continuous Flow

• Continuous flow means producing workaccording to three key principles

– Only what is needed

– Just when it is needed

– In the exact amount needed


• Actual customer demand drives the process.

• It creates a system of cascading requirements anddelivery instructions from downstream customers toupstream processes in which nothing is produced by theupstream supplier until the downstream customer signalsa need.

• The rate of production for each product/service is equal tothe rate of customer demand.

Pull Production


Lean Office Suggestions

• 5S Discipline

– Segregate your information into three categories(applies to hard and electronic information)

• Working

• Reference

• Archive

– Then cull the obsolete garbage.

– Benefit• Reduces the waste of motion and time spent searching for

your work



• Keep the Value Stream Flowing

– Focus on keeping your value stream flowing. Deal withthe work that enters your system—an email, a phone call,a memo, a project, etc—by taking one of four courses ofaction (4Ds):

• Doing it

• Delegating it

• Designating time to address it

• Dumping it



– Benefits

• When you rigorously apply the 4Ds nothing will returnto the inbox

– Value will continue to move forward

– Significant reduction in the amount of time spent working abacklog

– Significant reduction in the amount of time spent processingemails



• Smoothing the Flow– Cut down needless interruptions with schedules—times that

each employee is available for meeting for conversation

– Establish sustainable service level agreements for emailresponses rather than supporting the expectation of instantresponse

– Reduce the amount of multi-tasking in favor of single tasks,creating the understanding that doing one task at a time isactually faster and more efficient

– Benefits

• Significant reduction in time lost due to interruptions

• Improved productivity


DO NOT BEAFRAID, MY

FRIEND


lean office overview 2015

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