Understanding Lean - Business Continuous Improvements

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  • BUSINESS CONTINUOUS IMPROVEMENTSLean IT

  • Purpose of this presentation

    Knowledge sharing of Lean concept.Introduction of wastes categories.How we apply the Lean concept to our IT environment so that we could embrace the continuous process improvement culture in ABS

  • What is Lean ?

    Lean developed by Toyota (Toyota Production System) in 1948-1975

    Lean focuses on the elimination of waste.

    Waste rigorously defined in Lean world is anything does not add value to the final product or service

  • Values Added and Non Values Added concept

    Price is what you pay for, value is what you get. Warren Buffett.

  • Value Creation

    What our client cares about: providing what they need quicklyWhat our client DONT care about: How busy or idle our people/equipment is.

    Being smart about how we re-design our important processes to increase the throughput with the same or less labour.

    We need to focus on things that are moving along the process is what our client wants.

    We need to focus on how quickly our business process convert inputs to outputs that we can put into clients hand.

  • Muda, Muri and Muraare Japanese words used to describe major categories of wasteMuda: Activities that consume resources but added no values.

    Mura: Workflow is erratic so that you have to alternately hurry up and wait.

    Muri: When people are overly stressed

  • LEAN in IT environmentnot just for manufacturing production

    Examples of defects in an BA environment could be any of the following:

    Requirements that has to be rewrittenReadability in reportLate deliveryProcesses that doesnt depict as specifiedErrors in business rules

  • Reducing defects in our daily operation is a great way of improving process effectiveness:

    What causes defects:

    Inadequate control measuresUnbalanced staffing or inventory (not having something when its needed is a defect)Inadequate trainingBad process or product designInadequate understanding of customers needsPoor maintenance

  • LEAN in IT environmentnot just for manufacturing productionOverproductionDoing more that necessary to meet the goal is a waste. It is wasteful to create anything before it is needed.WaitingWhen your systems go down and response is slowWaiting for approvalApplications, servers, networks downtime is wasteA lean operation focuses on eliminating customer waitingTransportationAll transportation of material or information is waste. People have to move around to deliver services.All travel should be minimised.

  • LEAN in IT environment not just for manufacturing productionInventoryPCs, equipment, servers in warehouse are wasteDoing more that is necessary to meet the goal is a waste. It is wasteful to create anything before it is needed.MotionPeople run around to get their work done. Due to poor layout.Extra ProcessionDoing things in case we need it.Not understanding what was needed.Redundant steps in processing or approvals that add no value.

  • Summary

    In summary, to know what waste is help you:

    to see what your process is really doing and helps you to correctly identify potential areas of opportunities for continuous improvement.

    Happy Waste Hunting!

    **There was the Innovation Framework which was launched on 24 March 2013 and it is expected employees to commit to deliver continuous business process improvement through collaboration and innovation, and one to the tool to do this, is using the LEAN process improvement which is going to implement in the next 12 months.

    The first component of the framework is about the Culture and Capability which is foster and maintain awareness in all staff that they expected to help deliver continuous improvement through innovation. Build staff capacity to do this by providing access to appropriate tools and skills. And One of implementation focus for the next 12 month for this component is to train some workplace in LEAN process improvement.

    *Lean is an adaptation of a system developed by Toyota called the Toyota Production System. It was developed as a way of thinking and set of tools for making manufacturing process more efficient. It worked spectacularly well for Toyota, therefore it spread around the globe.

    Especially now, government agencies around attempt to reduce huge budget deficits as yet the demand on public services has been higher than ever.

    Lean is a methodology for solving business process problem.*A process is a series of activities to transform inputs to outputs.At a operational level, we get inputs that are client requirements and the outputs are client satisfaction.The key point is that there are many steps in most business process, but only some of them add value.

    The activities that are not useful to the client are called Non Added values activity.While Value is what the end of customer agreed to pay for.

    Processes are performing optimally when its increased in effectiveness ie: value for the client, project, enterprise and beyond.and increased in efficiency and more productivity (i.e. reduced costs on the project budget.

    When an organisation wants to improve productivity, they so often focus on people to ask question like how hard are they working? and Are they doing the right thing?But with Lean, they realise that they should focus on hows our process doing? and on things that are considered value to the client.*The next few slides will cover the fundamental LEAN concept for identifying waste. On the other hand the non added value process.*Muda, Muri and Mura are Japanese worlds used to describe major categories of waste.

    Muda is wasteful activities. This is any activity that consume organisation resource and adds no value to the product or service in the eyes of the customers.

    Mura is unevenness in an operation, such that when workflow is erratic so that you have to alternately speed up and wait. This is also a form of waste, as it leads to inefficiency in how your entire system works.

    Muri is the conditions where people or equipment are overly stressed. Overburdening causes equipment and people breakdown, stress and fatigue which all result to errors being formed. It is the condition where we ask our people to do unreasonable or impossible things.

    The most efficient operation is when things flow at an even pace, both equipment and people can work at a pace that allow them to be efficient, not get overburdened that provide a workplace where we dont make mistakes nor waste effort.

    *Let start with an obvious one: All defect are waste. If you made it, and threw it away, it is obviously waste. If the customer found it and threw it away, it is an even bigger waste. Waste occurs in the service business also. When we try to fix something but does not succeed, we have created waste. Mistakes in coding or anything requires correction or rework is waste. You get the idea.Motion If you can limit motion while doing a process, you can reduce the time and energy required for that process. This is quite a simple waste to understand. After all, you'd rather sit on your couch and control the tv with a remote rather than get up every time you want to change the channel or increase the volume. The waste of motion is usually one of the harder ones to reduce significantly and does not provide as big an impact to the total value stream as removal of the other wastes do. However, it is still a waste and in obvious cases should be removed.

    Waiting If you are waiting, nothing is being done. Quite simple. This waste is so simple but is overlooked most of the time. If product is sitting in the line waiting to be worked on by a machine, there is no value being added there. There is only value if it is being worked on by the machine.

    Defects This waste is quite self explanatory. Whether in a manufacturing or a service environment, a defect will definitely be waste because it is something that does not meet the customer's requirement. If your customer orders 1,000 red leather cases and you deliver 1,000 maroon leather cases, this will be a defect. The customer could reject all your goods, costing you all the time and material that was put into it. Perhaps they may accept it with a discount if you are lucky.On the service side, if the customer actually deposited $1,000 in the bank but due to some error only $100 is depositedthat would be a defect. This would lead to complaints from the customer and extra processing (which costs time and money) to set it right. It could even lead to the customer switching banks.

    Overproduction Making something that nobody is going to buy is definitely a waste. Old school production thinking used to be that a factory should always be running at full capacity and utilization. The thought being that the sales team would catch up and sell the products eventually even if at a discount. Unfortunately what happens is that a lot of other costs (and cash flow worries) get added on with this strategy. This also leads to some of the other 8 wastes such as inventory and non value added processing.**Waiting is always bad, train yourself to identify it as a wasteful activity when it occurs and to monitor parts of your process when it is likely to occur:

    *In summary, to know what waste is helps you to see what your process is really doing and helps you to correctly identify potential areas of opportunities.Happy waste hunting.*Everyday people go to work and have a process for getting their work done. Everyday, chances are, there are better ways of doing it quicker and more efficient. If you learn a better way of doing thing, then share it. Help others to perform better too.

    Quickness and efficiency equal better product and happier client.

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