LEAN 101

Mike NugentPrevention Services Division

CDPHE

“At Toyota we get brilliant results from average people managing a

brilliant process. Others get average results from brilliant people

managing broken processes.”

Source: Toyota Motor Co.

3

Toyota Production System

• Approach to Production– Build only what is needed– Stop if something goes wrong– Eliminate anything which does not

add value

• Philosophy of Work– Respect for Workers– Full utilization of workers’

capabilities– Entrust workers with responsibility

& authority

Taiichi Ohno

Core Concepts of Lean • Create continuous process flow to bring

problems to the surface• Use “pull” to avoid overproduction• Level out the workload (hejunka) • Get quality right the first time• Standardize tasks• Use visual controls so no problems are

hidden• Use only reliable, thoroughly tested

technology that serves your people and processes

• In pursuit of perfection

Customer Define Value

• Value-Added (VA):– Any activity performed during the

production of a product or service that increases the value to the customer or citizen

• Non-Value-Added (NVA):– Any activity that does not add value to

the customer or citizen, or that is not necessary in support of the main purpose. (These activities should be eliminated, simplified, reduced, or integrated.)

Sample Lean Event Tools

• Waste Walk • Rapid Improvement

Events (RIE)• 5S• Kanban• Process Mapping

6

Waste

• Waste is disrespectful of humanity – Because it squanders scarce resources

• Waste is disrespectful of individuals – Because it asks them to do work with

no value - President Toyota• Waste is disrespectful to Colorado

citizens– By asking them to endure processes with

no value

Waste

Overproduction

Inventory

Extra Processing

Motion

Defects/Rework

Waiting

Transportation

• Processing that the customer does not need or want

• Duplication• Processing a small deal the same as a large deal• Navigating multiple screens to input data• Printing material• Looking/researching for data/info

• Incorrect data on application• Missed customer due dates• Rework

• Application waiting approval• Waiting on information from customer• Waiting on information from 3rd party

• Receiving hardcopies from customer• Shipping hard copies for customer signature• Manually walking the application for approval

7 Wastes Characteristics

• Staff Members waiting• Multiple applications awaiting approval

Waste Walk

Kaizen- Rapid Improvement Event (RIE)

• Goal: Generate ideas for improvements and test changes at the work site

• Typically 4 days and report out event• Appropriate scope• Prework and data gathering key• Cross-functional team (8-10)

– Black Belt team leader– Process owner– 1/3 fresh eyes– 1/3 Lean experience– 1/3 team doing the work

Kaizen- Rapid Improvement Event (RIE)

Day 1 Examine a process/function or area Identify areas of waste, non-customer value

and metrics

Day 2 Develop new process, standard work and communication to eliminate identified waste and increase value

Day 3 Implement the new processes, standard work Monitor production board and communicate

standards Observe new process and any change in

metrics

Day 4 Adjust and fine tune new standards

RIE Day 4

5S• Sort (does it belong here)• Set in Order (organize)• Shine (clean)• Standardize (repetition process)• Sustain (metrics posted,

accountability)

How 5S will be used at PSD

• Reduce searching• Trigger an activity• Define standards for

consistent results

• Gain flow• Enable

communication and information sharing

• Mistake-proof tasks

Push and Pull method of Work Flow

Push Method: A method in which production of the item begins in advance of customer needs.

Example: A buffet where food is prepared in advance.

Pull Method: A method in which customer demand activates production of the service or item.

Example: A restaurant where food is only prepared when orders are placed.

Lean systems use the pull method of work flow.

KANBAN

Kanban means “card” or “visible record” in Japanese & refers to cards used to control the flow of production through a factory.

KANBAN is a PULL System .

Kanban System

Office Supplies Kanban Project

Process Mapping • Diagram that visually displays a series

of events, activities or steps that occur within a given process– Helps to define and analyze a process– Identifies deviations from the norm – Shows relationships between steps or

departments involved– Highlights value-added and non

value-added step in a process

1. What you think it is...

3. What you would like itto be...

2. What it actually is...

Versions of a Process

Process Mapping

Yellow notes: steps in the process

Pink notes: identify opportunities for improvement

Accurate?

PM contacts grantee

PM contacts

mgr

PM contacts control analyst

Add to pending

file

Response from

grantee

Need to resubmit?

Move forward

Start over

Keep old until new received

When new received, check pile

PM signs

PM enters into SAP

PM routes to Mgr

Accurate?

Send back to PM

Manager signs

Sends to Control Analyst

Accurate?

Type claim return form

CA initials and returns

to PM

PM copies claim for file

Original claim goes to Teri for logging

Copy claim return form

Submit claim return form

to Mgr

File claim return form

Mgr goes to PM for claim

resolution

PM resolves and forwards to Control Analyst

for initials

PM closes loop with

Mgr

Paul logs MOST claims

and walks upstairs

Teri walks claims upstairs to

business office mail box

Al receives claims from

mailbox

Al date stamps and distributes

Janet receives all

claims

Janet logs all claims and assigns #

Write claim # down and

sign

Janet pulls copy of purchase order/

contract and attaches to claim

Some claims: enter match/local benefit info into

spreadsheet

Take purchase order and claim form to

assure correct fund/performance period

Check vendor and remittant

address

Accurate?

Hold claim and contact

PM via email/phone

Enter into SAP (“parking” invoice)

Hand packet to Michael K. (2-3 times/

day)

View document # and compare with claim and

contract

Compare contract period

“Post it”Mike K.

signs claim form

Return to Janet

Janet separates claim form

purchase order and returns to file

Batch claim forms, copy

page 1 & 2, and return to PM

Before 2pm?

Paid next business

day

Paid business

day plus 1

Scan page 1 & 2 of claim form and file

in EDM (OTS)

File original claim (hard copy)

(Business office)

PM receives claim form

from grantee

Data stamp

PM Actions:-Verifies info on claim form-Checks supporting document-Verify math accuracy-Verify match & local benefit-Verify expenses are eligible-OTS contract mgmt manual-NHTSA federal finance document-CONUS/Travel infoFiscal rules (state & OTS)

Mgr Actions:-Verifies expenses fall within claim period-Verifies travel expenses-Verifies eligibility of expenses-Reviews match/local benefits on claim form-Verifies spending rate

Control Analyst Actions:-Verifies expenses fall within contract period-Checks claim against prior expenses-Checks SAP against claim-Completes all PM and Mgr steps

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

CURRENT STATE

Claim submitted

Proj Mgr reviews claim

Accurate?

Send claim to Controls

Analyst for review

Compile list of errors

Send claim to Controls

Analyst for review

Accurate?

Put claim in outbox for business

office

Compile list of errors

Additional errors?

Add errors to list

Return claim form to Proj

Mgr

Proj Mgr contacts vendor

Errors corrected

Jenn takes claim(s) to business

office

Business office receives claim(s)

Distribute - Tech

Check remittant address

Accurate?

Contact PM W9

Park invoice

Claim to Mike

Mgr Review Post invoiceForm to Janet

Return original claim

to PM

No

Yes No

Yes

No

Yes

No

Yes

FUTURE STATE

LEAN GoalsApril 1, 2012-March 31, 2013

• Create a general awareness and enthusiasm regarding LEAN process improvement amongst PSD employees

• Provide managers and supervisors opportunities to attend training in LEAN process improvement philosophy, methods, and tools

• Provide mentorship and coaching to PSD managers and supervisors in the application of LEAN process improvement principles

• Demonstrate measurable improvements in PSD program delivery, business practice, and Division efficiency and efficacy

• Leverage PSD LEAN expertise in facilitating cross departmental improvement initiatives

LEAN ActivitiesApril 1, 2012-March 31, 2013

• Provide LEAN 101 presentation to PSD managers, supervisors, and employees

• Provide training to managers and supervisors related to LEAN tools including but not limited to 5S, standard work, process mapping, and waste walks

• Develop and regularly update LEAN tracking sheet for PSD operations documenting cost savings, cost avoidance, and improvements in efficiency and customer service

• Provide representation and support to CDPHE’s LEAN Advisory Group

• Conduct Rapid Improvement Events (RIE) with an emphasis on strong baseline metrics and process improvement sustainability

• Conduct Program Reviews in an effort to improve program efficacy and customer service

Measures for Activities• A minimum of 125 employees attend LEAN 101

presentation during performance period• A minimum of 50 employees attend at least one training

related to the use of LEAN tools such as 5S, standard work, process mapping, and waste walks.

• Using the PSD LEAN tracking sheet, document at least $500,000 in cost savings, cost avoidance, and/or waste reduction during the performance period

• Provide PSD representation to at least 75% of CDPHE LEAN Advisory Group meetings

• Conduct at least two PSD Rapid Improvement Events (RIE)

• Conduct at least two PSD Program Reviews

Progress Reports

RIEs n=2

Program Reviews n=2

LEAN 101 n=125

LEAN Tools n=50

Cost Savings n=$500,000

CDPHE Lean Advisory Meetings n=9

0%

50%

100%

GoalActual

Comments and Questions